An examination of the process and costs of transferring manufacturing technology from U.S. to Japanese aircraft producers. The basic transfer techniques are those used in the four programs that led to Japanese production of U.S.-designed aircraft during the 1950s and 1960s. The Japanese coproducers were furnished legal rights, manufacturing drawings, tool design information and, in some instances, tooling. Their U.S. counterparts also supplied planning and processing information, technical assistance teams, and some back-up manufacturing capability. Because U.S. firms were paid for data and technical assistance, they had clear incentives to provide Japanese firms with the results of U.S. experience. Coproduction appears to have important advantages over other economic and military assistance arrangements. Unlike grant-aid, the recipient country shares the financial burden. Unlike direct military sales, coproduction is more economically and politically acceptable because the weapons are produced locally. The methodological implications for economic theory merit emphasis. Transfers of technology can be analyzed with the same tools, problems, and benefits associated with studies of market-directed flows of other goods and services.