The second in a series of reports by a task force subcommittee on deinstitutionalization of developmentally disabled persons in Ohio, the monograph focuses on residential services. Basic planning principles, reflecting philosophical and legal concepts such as least restrictive alternative, normalization, and respect for human dignity, are reviewed. The next section considers the negative aspects of the continuum of residential services, including the following: (1) such a continuum is highly expensive to implement (most of the resources go to the more restrictive settings); (2) it reinforces and deepens the perception of difference in disabled persons; and (3) such a continuum prohibits development of a truly individualized program in congregated, segregated settings. In contrast to the continuum approach, the report cites advantages of the home-centered approach. Differences between a facility-based and home-centered approach are charted in terms of language, community presence and participation, program function, and decision making. Issues specific to children, adults, and handicapped persons with special needs (including the elderly) are noted. Aspects of management models needed to develop integrated residential options are described. Ohio's needs for preparing for transitions to a home centered residential system are briefly noted. Recommendations regarding general aspects, planning, training and technical assistance, funding, and monitoring and licensure conclude the report. (CL)