Many studies of innovation adoption in health care organizations focus either on organizational characteristics or the institutional environment, but not both. Furthermore, these perspectives are rarely employed simultaneously in both public and private health care organizations. This research considers the public-private distinction, organizational compatibility, and interorganizational referral relationships in the use of selective serotonin reuptake inhibitors (SSRIs) by substance abuse treatment organizations. Using data from nationally representative samples of 363 publicly funded and 403 privately funded substance abuse treatment centers, a four-category typology of public and private organizations initially predicted variation in SSRI use. However, some differences were no longer significant once organizational and environmental characteristics were added to the statistical model. These data support hypotheses about the associations between organizational characteristics and SSRI use as well as hypotheses regarding the external environment. Future research should continue to integrate both internal and external factors in theoretical explanations of innovation adoption. (Contains 1 note and 2 tables.)