  We investigate the formation of planetesimals via the gravitational
instability of solids that have settled to the midplane of a circumstellar
disk. Vertical shear between the gas and a subdisk of solids induces turbulent
mixing which inhibits gravitational instability. Working in the limit of small,
well-coupled particles, we find that the mixing becomes ineffective when the
surface density ratio of solids to gas exceeds a critical value. Solids in
excess of this precipitation limit can undergo midplane gravitational
instability and form planetesimals. However, this saturation effect typically
requires increasing the local ratio of solid to gaseous surface density by
factors of two to ten times cosmic abundances, depending on the exact
properties of the gas disk. We discuss existing astrophysical mechanisms for
augmenting the ratio of solids to gas in protoplanetary disks by such factors,
and investigate a particular process that depends on the radial variations of
orbital drift speeds induced by gas drag. This mechanism can concentrate
millimeter sized chondrules to the supercritical surface density in < few x
10^6 years, a suggestive timescale for the disappearance of dusty disks in T
Tauri stars. We discuss the relevance of our results to some outstanding
puzzles in planet formation theory: the size of the observed solar system, and
the rapid type I migration of Earth mass bodies.
