This study of life satisfaction and competence was part of the Individual and Community Competence Project (Gatz and others, 1976). It included two groups of people, community workers (N=21) and non-workers (N=22), from each of two settings, Model Neighborhoods Areas (MNA) and Central Area (CNA). The MNA is a black area, while the CNA is a white area. All participants were age 50 or older (average age = 62.6). The following measures were administered: (1) a Life Satisfaction Index; (2) a Behavioral Attributes of Psychosocial Competence (BAPC) scale; (3) an Internality-Externality (I-E) Scale; (4) a Trust Scale; and (5) a community survey, assessing familiarity and satisfaction with the community, and perception of its needs. Results indicate that for residents of MNA, life satisfaction is correlated significantly with the BAPC measure of coping style and with internality. Thus, for black residents in a low-resource area, life satisfaction appears highly dependent on an individual's competence characteristics. For residents of CNA, with greater resources, life satisfaction is not related to being more competent. In summary, individual competence is an important factor in person-environment "fit." Life satisfaction by itself is not an adequate criterion for evaluation of programs for the elderly. Competence must also be included. (Author/JLL)