Many countries use state‐owned, for‐profit, and third sector organizations to provide public services, generating ‘hybrid’ organizational forms. This article examines how the hybridization of organizations in the public sector is influenced by interaction between regulatory change and professional communities. It presents qualitative data on three areas of the UK public sector that have undergone marketization: healthcare, broadcasting, and postal services. Implementation of market‐based reform in public sector organizations is shaped by sector‐specific differences in professional communities, as these groups interact with reform processes. Sectoral differences in communities include their power to influence reform, their persistence despite reform, and their alignment with the direction of change or innovation. Equally, the dynamics of professional communities can be affected by reform. Policymakers need to take account of the ways that implementation of hybrid forms interacts with professional communities, including risk of disrupting existing relationships based on communities that contribute to learning.