Contemporary environmental challenges have led governments to seek innovative ways to overcome the limits of traditional regulatory models, demanding a “change management”. This article addresses a case study regarding innovations promoted in the extended-producer responsibility (EPR) implementation by São Paulo state, Brazil. After facing resistance from industry, local government changed its approach from traditional regulation to negotiated agreements. As one of the researchers was an active part of the process, the Active Research method was adopted, through the "changing as three steps" model, aiming to understand how change occurs and what its critical factors (facilitators, barriers and improvement opportunities). Results indicate that the incorporation of the principles of regulatory quality has made it possible to overcome the gridlock and reopen the dialog, leading to agreements between industry and government. The evidence also shows that the EPR strategy has been continued and expanded, with the renewal of commitments with more ambitious goals, besides the inclusion of retailers in some EPR systems. Regulation has also evolved, with the incorporation of EPR in the environmental permitting, intending to combat free riders. Facilitators for change included recognition of the government, a gradual approach, cultural changes in companies and the systematization of information. Among the barriers, the most crucial were the low adherence of retailers and importers, the considerable presence of free riders, difficulties with the participation of municipalities, the absence of tax incentives, the low adhesion of generators, high operating costs, and collection problems. Finally, among the opportunities for improvement, results show the expansion of participants, mainly municipalities and retailers, a tax review, inclusion in environmental education programs, incorporation in environmental permitting, increased surveillance to combat free riders, and incentives to the recycling chain. Finally, the conclusions emphasize the success in incorporating principles of environmental regulatory quality in the São Paulo EPR implementation strategy. This fact strengthens the conclusions of previous research and suggests that its incorporation in policy design has the potential to overcome implementation gridlocks in complex environmental regulations.