To provide practical strategies for conducting and evaluating analyses of qualitative data applicable for health services researchers. DATA SOURCES AND DESIGN: We draw on extant qualitative methodological literature to describe practical approaches to qualitative data analysis. Approaches to data analysis vary by discipline and analytic tradition; however, we focus on qualitative data analysis that has as a goal the generation of taxonomy, themes, and theory germane to health services research. We describe an approach to qualitative data analysis that applies the principles of inductive reasoning while also employing predetermined code types to guide data analysis and interpretation. These code types (conceptual, relationship, perspective, participant characteristics, and setting codes) define a structure that is appropriate for generation of taxonomy, themes, and theory. Conceptual codes and subcodes facilitate the development of taxonomies. Relationship and perspective codes facilitate the development of themes and theory. Intersectional analyses with data coded for participant characteristics and setting codes can facilitate comparative analyses. Qualitative inquiry can improve the description and explanation of complex, real-world phenomena pertinent to health services research. Greater understanding of the processes of qualitative data analysis can be helpful for health services researchers as they use these methods themselves or collaborate with qualitative researchers from a wide range of disciplines.