Publicly funded demonstration projects represent a critical intermediate step between basic R&D on the one hand, and large-scale commercialization of new sustainable technology on the other. However, these projects often suffer from various technical and nontechnical difficulties, frequently fail to meet objectives, and sometimes stall despite the best intentions of their facilitators. This paper reports on a multiple case study of 21 demonstration projects in the area of sustainable technology set in Sweden and offers two contributions. First, it maps the project-internal and external factors that allow or prohibit demonstration projects to reach their goals. Second, it suggests a process model outlining the key activities for setting up a new demonstration project. By doing so, the paper provides important implications for the process of developing and commercializing sustainable technologies. The escalating environmental crisis in particular underscores the need for new knowledge about how cleaner and more sustainable technologies can be applied.