This document reports the results of the first comprehensive analysis of the effects of Federal funds on public library services in the United States. Using a case-study approach, a team studied Federally funded public-library projects in 11 states, interviewing State library agency and local public library personnel in each state. The results of the study have two implications for Federal library-services policy: (1) that the formula by which the Library Services and Construction Act funds are allocated to the States should be revised to more realistically reflect State and local attitudes toward public library service, and (2) that the U.S. Office of Education should assume national leadership in the development of research, professional-training, and interlibrary coordination programs. (JL)