Background Policymakers stimulate competition in universalistic health-care systems while encouraging the formation of service provision networks among hospital organizations. This article addresses a gap in the extant literature by empirically analyzing simultaneous collaboration and competition between hospitals within the Italian National Health Service, where important procompetition reforms have been implemented. Purpose To explore how rising competition between hospitals relates to their propensity to collaborate with other local providers. Methods Longitudinal data on interhospital collaboration and competition collected in an Italian region from 2003 to 2007 are analyzed. Social network analysis techniques are applied to study the structure and dynamics of interhospital collaboration. Negative binomial regressions are employed to explore how interhospital competition relates to the collaborative network over time. Results Competition among providers does not hinder interhospital collaboration. Collaboration is primarily local, with resource complementarity and differentials in the volume of activity and hospital performance explaining the propensity to collaborate.