Agile development methods borrowed from the software industry are now being used by a handful of manufacturing firms for the development of physical products. Agile methods, which include time-boxed sprints, daily stand-up meetings, and early demos and retrospectives, are typically embedded within some or all of the stages of an existing Stage-Gate system. This article presents six case studies from major firms experimenting with Agile–Stage-Gate hybrids. These results show that early outcomes of these efforts are quite positive; some firms report significant improvements in both time to market and development productivity, as well as faster responses to changing market conditions and customer needs and higher project team morale. However, they also identified many challenges in implementing Agile–Stage-Gate hybrids, including addressing management skepticism, finding the needed resources to field dedicated teams, and dealing with fluid product definitions and development plans. Based on case firms’ experiences, we provide recommendations for implementing a hybrid product development system.