Building on recent work by Arkani-Hamed and the present authors, we constru
ct realistic models that break supersymmetry dynamically and give rise to c
omposite quarks and leptons, all in a single strongly coupled sector. The m
ost important improvement compared to earlier models is that the second-gen
eration composite states correspond to dimension-2 ''meson" operators in th
e ultraviolet. This leads to a higher scale for flavor physics and gives a
completely natural suppression of flavor-changing neutral currents. We also
construct models in which the hierarchy of Yukawa couplings is explained b
y the dimensionality of composite states. These models provide an interesti
ng and viable alternative to gravity- and gauge-mediated models. The generi
c signatures are unification of scalar masses with different quantum number
s at the compositeness scale, and lighter gaugino, Higgsino, and third-gene
ration squark and slepton masses. We also analyze large classes of models t
hat give rise to local vacua with both compositeness and supersymmetry brea
king, based on gauge theories with confining, fixed-point, or free-magnetic
dynamics.