THE PURPOSES OF THIS PROJECT WERE (1) TO EVALUATE THE BEHAVIORAL CHANGES THAT TAKE PLACE WITHIN THE PUBLIC AND INSTITUTIONAL SCHOOL POPULATIONS AND NONSCHOOL POPULATIONS OF SEVERELY RETARDED CHILDREN, AND (2) TO EVALUATE THE CHANGES IN PARENT ATTITUDE AND FAMILY ADJUSTMENT OF THE PARENTS. THIS REPORT IS CONFINED TO PHASE 1 OF AN ONGOING PROJECT AND IS PRIMARILY CONCERNED WITH THE MAJOR ASPECTS OF THE PLANNING PERIOD - THE EXPERIMENTAL RATIONALE, THE EXPERIMENTAL DESIGN, AND THE DEVELOPMENT OF INSTRUMENTS. THE EXPERIMENTAL DESIGN CONSTITUTED A COMPARISON OF THE SOCIAL COMPETENCY DEVELOPMENT OF SEVERELY MENTALLY RETARDED CHILDREN IN FOUR SETTINGS - COMMUNITY SCHOOL, COMMUNITY NONSCHOOL, INSTITUTIONAL SCHOOL, AND INSTITUTIONAL NONSCHOOL. SUBJECTS IN ALL OF THE GROUPS WERE BETWEEN THE CHRONOLOGICAL AGES OF 6 AND 12, AND HAD INTELLIGENCE QUOTIENTS RANGING FROM APPROXIMATELY 25 THROUGH 55. THE SOCIAL COMPETENCY OF THESE CHILDREN WAS DETERMINED AT THE INITIATION AND COMPLETION OF THE 2-YEAR EXPERIMENTAL PERIOD. THE PARENTS OF BOTH COMMUNITY SAMPLES WERE INTERVIEWED DURING THIS SAME PERIOD IN ORDER TO ASSESS CHANGES IN PARENTAL ADAPTABILITY. THE TWO INSTRUMENTS DEVELOPED WERE (1) THE SAN FRANCISCO SOCIAL COMPETENCY SCALE AND (2) THE PARENT ADAPTABILITY SCALE. (GC)