A 1984 study of biotechnology companies reveals that nearly one-half of all such firms fund research in universities. Industry may support as much as one-quarter of all biotechnology research in institutions of higher education. These investments seem to be yielding substantial benefits to involved firms. Per dollar invested, university research is generating more patent applications than is other company research. Research relationships do pose some risks to traditional university values such as openness of communication among scholars. These risks may be greater in relationships involving small firms. The data also reveal that government is now, and seems likely to remain, the principal source of support for university research in biotechnology.