Today, most agree that the health care system in the United States is in need of reform and that existing health disparities have huge implications for both that system and society as a whole. As a result, academic medicine has come to play a central role in addressing health disparities in a pluralistic society. Today, diversity is no longer a projection; it is a reality. Yet, most diversity efforts continue to run parallel to core institutional processes, rather than as part of the mission of the institution. Researchers agree that, to promote a healthy and vital society, leaders in academic medicine must create institutions that can serve diverse populations. To do so, they must first increase their institutional capacity for diversity. This article outlines the next generation of work on diversity and inclusion, drawing on a broad body of research and practice to identify some of the key elements for building the kind of institutional capacity necessary for sustained change in academic medicine, including a deeper engagement of mission, one that considers diversity as core to excellence; an inclusive and differentiated understanding of diversity institutionally; alignment and intentionality with respect to key institutional elements; key metrics associated with success and a serious process to monitor progress; and the identification of diverse talent for leadership at all levels.