This paper contributes to theorizing and analysing different processes of co-production and value co-creation within outcome-based contracting (OBC). It investigates how different OBC mechanisms are implemented in practice, and with what implications for public service users’ experiences and outcomes. Using realist synthesis techniques, the paper analyses existing evaluations that focus on users’ experiences of OBC in welfare-to-work services and a homelessness project. It highlights how OBC can affect equality, effectiveness and innovation within public services. The paper also exemplifies the importance of analysing how the political and policy context of public services affects both service pathways and their outcomes.