The goal of this paper was to develop a theory of organization/environment interaction by examining the impact of perceived environmental uncertainty on organizational processes and on organizational goal attainment. It examines theories from the organizational environment literature and derives corollaries that are empirically tested using a data set of 99 county extension offices in Iowa. The theory is developed using axiomatic theory-building techniques and inductive path analysis. First, the major theories are identified and defined through a review of the literature. Second, a set of theoretical statements is identified and analyzed for theoretical and operational linkages. Third, path analysis is used to evaluate the principles and make revisions in the theory. Finally, the revised theory is discussed and critiqued on the basis of the research presented, scope, and parsimony. The paper concludes that the theory may be appropriate only for organizations that are coping well with conditions of uncertainty, which does not apply to the county extension offices. (Author/LD)