On-street running in mixed traffic has been identified as the least desirable right-of-way for light rail and tram systems. While most cities in the developed world have withdrawn streetcar systems, substantial networks have been retained in Melbourne, Australia, and Toronto, Canada. Although some commentators have seen the retention of these systems as visionary, there are substantial challenges to be faced in addressing conflicts between streetcars and rising road traffic. Poor running speeds, unreliability, safety, and difficulties in providing universal access are significant issues for modern streetcar systems. Experiences are described in regard to planning and operating the Melbourne and Toronto streetcar systems. The types of challenges being faced in providing services are contrasted. Programs to address the challenge of creating modern high-quality transit systems out of streetcars are compared. Finally, success strategies in modernizing streetcar systems are identified.