The community mediation movement in the United States arose in the late 1970s as an alternative to a formalized justice system that was perceived to be costly, time consuming, and unresponsive to individual and community needs. Community mediation advocates also valued community training, social justice, volunteerism, empowerment, and local control over conflict resolution mechanisms. But over the past quarter century, community mediation has become increasingly institutionalized and has undergone various degrees of co-optation in its evolving relationship with the court system. Drawing on the literatures of dispute resolution, co-optation, and social movements, we analyze the evolution of community mediation and identify the degrees and dimensions of its co-optation. Thus, we develop a four-stage model of co-optation as it has occurred within the community mediation movement, identifying multiple steps in each stage. This analysis facilitates greater understanding of specific events, particular processes, and individual decisions and dilemmas that mediation activists face in their working relationships with their communities and the formal legal system. Further, scholars studying similar processes in other social movements may find that this stage model of co-optation, in whole or in part, is useful to their analyses of other movements.