The Ohio University College of Osteopathic Medicine in 2005 created an innovative competitive grant program aimed at stimulating faculty to submit more and better NIH research proposals, thereby increasing the probability of success. In this internal competition, three experienced external reviewers critique each proposal and assign a priority score, mirroring the NIH review process. An internal panel then selects the two to three best proposals to receive $20,000 awards, contingent upon submission to NIH of a revised proposal that incorporates the comments and suggestions of the reviewers. Thus, the awardees receive additional resources to move their project forward. Moreover, all participants benefit from the constructive reviews, the "free" review cycle (in addition to the NIH "three-strike" system), and the excellent learning experience in grant preparation, revision and submission of competitive proposals. Academic researchers and administrators, particularly at smaller, less research-intensive institutions, today face a challenging environment with increased competition for a limited funding pool. Under such circumstances, an internal grant development program may be a great avenue for mentoring and education for faculty, and also serve as a cost-effective investment for research officers to increase external research funding as well as enhance the research skills of faculty. (Contains 2 figures.)