Editors' Summary: Supplemental Environmental Projects (SEPs) are environmentally beneficial projects that regulated parties perform in exchange for penalty reductions when settling claims for alleged violations. This Article discusses the use of SEPs, focusing particularly on EPA's 1995 SEP policy. The author first provides a context for understanding SEPs with a general review of the role of penalty policies in EPA enforcement, culminating in a discussion of the evolution of EPA policies about SEPs. Next, the author reviews EPA's 1995 policy in detail, discusses EPA's experience with SEPs, and alerts readers to information about SEPs in EPA "Sector Notebooks." He then discusses the use of SEPs in state and citizen enforcement actions and provides some suggestions for negotiators. The author concludes that use of SEPs in federal and state enforcement is likely to increase and that SEPs have the potential to provide important environmental benefits without a significant increase in government enforcement costs.