Background: In recent years, several states have created mandatory prison-diversion programs for felony drug possessors. These programs have both individual-level goals of reducing recidivism rates and system-level goals of reducing prison populations. Objective: This study examines the individual level and system level impact of Kansas' Senate Bill 123 (SB 123), which created mandatory probation/treatment sentences for felony drug possessors. Research Design: A nonrandomized quasi-experimental design was used to evaluate the recidivism rates of drug possessors sentenced to SB 123 relative to drug possessors sentenced to standard probation, intensive probation, or prison. Propensity score matching techniques were used to identify comparison groups. Changes in probabilities of prison sentences preimplementation and postimplementation were used to assess changes in prison admissions and prison populations. Subjects: The treatment group included all eligible drug possessors sentenced to SB 123 between November 1, 2003, and October 31, 2006. The comparison groups included all eligible drug possessors sentenced to standard probation, intensive probation, or prison during the same time period. Measures: Arrests, violations, revocation resulting in a prison sentence, and reconviction resulting in a prison sentence within 24 months of risk in the community served as the key individual-level outcome measures. Prison admissions and bed days served as the key system-level outcome measures. Results: At the individual level, SB 123 increased likelihood of recidivism compared to standard probation and had no significant effect compared to intensive probation or prison. At the system level, SB 123 diverted offenders from prison at sentencing but only marginally reduced prison admissions or saved bed days. Conclusions: Conflicting impacts are a consequence of program design--eligibility requirements diverting probation-bound offenders, mandatory sentencing requiring the same diversion sentence for all offenders, and diversion sentences longer than those imposed preimplementation. Results cast doubt on the effectiveness of mandatory diversion programs to achieve both individual-level and system-level impacts. (Contains 12 notes, 1 figure and 5 tables.)