Spectacular accomplishments in biomedical research have given birth to what is now perceived as a biological revolution, an epoch in which man has acquired the skill to manipulate the fundamental unit of heredity, the gene. This revolution carries with it the prospect of remarkable opportunities to improve the quality of life and to probe with increasing precision the mysteries of cellular organization and function. It comes, however, at a time when the opportunity to exploit this new knowledge may be limited by a significant reduction in federal support of basic research, and a situation which prompts universities and other centers of scientific activity to seek funding from industrial patrons. This trend has generated a new constellation of institutional challenges, for one apparent result of industrial sponsorship of university-based biomedical research is a threat to university governance as altered allegiances emerge and as the potential for financial gain appears almost limitless. This essay explores background issues leading to these new alliances, seeks to identify some of the central problems emerging for university administrators, faculty, and students, and then poses a key question: Can industrial support for university-based biomedical research fill the apparent short-fall in federal dollars in the foreseeable future? An analysis of available data indicates that this outcome is unlikely either now or in the years ahead.