The Irvine Ranch in Southern California is the largest privately master-planned 'new community' or satellite new town ever to be built in the US. The development was led by the private sector but government played an important role. This paper traces how the federal government shaped the Irvine development through a range of policies and programmes from defence to habitat protection. In turn, the developers of Irvine were cast in a role of co-ordinating parts of government. This analysis highlights some of the problems likely to be faced as governments promote similarly phased, co-ordinated and mixed-use proposals under the rubric of smart growth or sustainable development.