The Indian Health Service (IHS) has made huge strides in narrowing health disparities between American Indian and Alaska Native (AI/AN) populations and other racial and ethnic groups. Yet, health disparities experienced by AI/AN people persist, with deep historical roots combined with present-day challenges. Here we review the history of the IHS from colonization to the present-day system, highlight persistent disparities in AI/AN health and health care, and discuss six key present-day challenges: inadequate funding, limited human resources, challenges associated with transitioning services from federal to Tribal control through contracting and compacting, evolving federal and state programs, the need for culturally sensitive services, and the promise and challenges of health technology.