Researchers have debated whether gangs are selling drugs "freelance" or whether gang drug selling is more organized. Some have speculated that gangs are evolving into organized crime. This article uses contingency theory from the literature on organizations to examine the sources of variation in drug-selling organization of gangs from Milwaukee. In the turbulent environment surrounding drug selling, inflexible vertically organized drug businesses are unlikely to be successful. The failure of this kind of entrepreneurial drug gang in Milwaukee is described Most gang drug sales in Milwaukee were by neighborhood-based, loosely organized operations. Neighborhood-based drug-selling organization varied according to the lucrativeness and stability of the drug market. Complexity of gang drug organization generally varied inversely to the degree that drug sales were centered on the neighborhood as a market. Ethnicity may also exercise an independent effect on organization. Research needs to pay more attention to organizational theory and the neighborhood context of gang activities and organization.