Problem: To help achieve climate policy goals, California recently adopted measures to reduce greenhouse gas emissions (GHGs) by promoting more efficient development. One policy, Senate Bill (SB) 375, gained widespread attention as “the nation's first law to combat greenhouse gas emissions by reducing sprawl” (Office of the Governor of California, 2008). What does experience to date indicate about the effectiveness of California's institutional model for achieving GHG reductions from transportation and land use? Purpose: SB 375, adopted in 2008, requires California's urban regions to achieve mandated GHG reductions through coordinated transportation and land use. After its passage, the California Air Resources Board moderated a lively, contentious negotiation process with the state's 18 Metropolitan Planning Organizations (MPOs) to define potential GHG reductions and assign the mandated targets. We evaluate progress toward achieving SB 375 goals, analyzing the target-setting process and local government engagement. We assess the viability of California's largely voluntary model for achieving climate goals through smart growth. Methods: We consider the two-year-long SB 375 target-setting process as an exercise in institution building, creating new planning requirements that build on existing regional processes but also require the development of new techniques for systematically evaluating policy options and assigning regional responsibility. We evaluate MPO data on the potential of various smart growth policy options for reducing GHGs, and consider the activities and perspective of local planners by incorporating findings from surveys and interviews. Results and conclusions: SB 375 demonstrates that regional smart growth climate policy can be built on existing planning processes, particularly for transportation and associated air quality requirements. However, regional and local planners express concerns about inadequate resources for implementation. Without strong state or federal mandates or incentives that favor the policy outcomes envisioned in SB 375, the law expects more from MPOs than they can easily accomplish. As executed so far, SB 375 adds only a modest contribution to state efforts to reduce GHGs by 2020. At the local level, we document a sharp rise in climate policymaking, but also gaps between regional and local assessment and mitigation strategies. Takeaway for practice: It is possible to systematize collaborative climate goal setting for development planning across regions, but negotiating fair share responsibilities is inherently political and requires strong institutions in order to succeed. Effective smart growth climate planning requires matching responsibility and authority with incentives that integrate state, regional, and local needs and responsibilities; tough performance mandates and/or strong incentives are needed to bridge the traditional regional–local divide. To reinforce climate policy through local environmental review, requirements must be linked to regional plans; otherwise, project-by-project mitigation may work at cross-purposes with wider strategies.