Current housing trends point to an increasing interest from homebuyers to demand houses that reflect their personal and unique styles, and which are individually configured according to these needs (NAHB, 2004). These homebuyers in turn are unwilling to settle for standard models that sacrifice what they really want in a home. At the same time this creates pressure on builders who are reluctant to sacrifice production efficiencies by deviating from standard models. Such customization desired by demanding customers can disrupt the entire estimating, production, delivery and management process, making it even more difficult to manage homebuilding efficiently and effectively. The question faced by homebuilders in this conditions is, how to manage this trade-off and deliver exactly what homebuyers want, at reasonable prices and lead times with minimal disruptions in efficiencies. Mass Customization (MC) is an emerging production paradigm that seeks to manage the trade-offs between product variety and mass efficiency, while fulfilling individual customer requirements. The general purpose of this research is to improve the effectiveness and efficiency of housing production through the implementation of mass customization strategies. More specifically, this research focuses on the study of the production system through the application of lean production principles, as an approach to enable mass customization. This study first characterizes how much product choice is currently being offered by U.S. homebuilders and what is the impact of customization on production efficiency; and then focuses on the evaluation of the relationships between mass customization and lean production principles. Results revealed that homebuilders offering increased product choice are likely to suffer poorer labor productivity, greater inventory, higher production costs, more quality issues, less satisfied homebuyers, and lower space efficiency. In general, operational performance deteriorated with an increase in product choice. Therefore, industrialized housing manufacturers have not reached the ideal of mass customization and are paying a price for offering more choices to their customers. Homebuilders could mitigate these challenges by using lean concepts. In general, case studies showed that product choice does not necessarily make the implementation of lean concepts more difficult. Some lean concepts, like workload balancing and standardizing tasks, clearly facilitated the handling of product choice. Other lean concepts, like creating a continuous process flow, can be made to work well, even with increased choice. Case study results suggested that good concepts for lean (e.g., efficient continuous flow, effective pull system, workload leveling, defect-free processes, standard tasks, good visual controls, and reliable technology) were also good concepts for (or easily accommodated) handling a range of product choice.