To attempt to rehabilitate infants and preschool institutionalized children who were emotionally and culturally deprived, an experiment in environmental adaptation was established in a children's home. An original experiment involving nine children indicated the need to make staff and building changes. Inservice training emphasized child development and the individuality of each resident; volunteer mothers were recruited. Building modifications included child-sized facilities and stimulating materials. Staff members rated the 83 children on security scales appropriate to the child's age. A regular schedule of daily events and play therapy was established. The staff found that children gradually showed emotional, social, and speech development and became increasingly competent in self help skills. After 15 months, 44 children had been returned to their parents or placed in foster or adoptive homes. Results indicated that an institution could promote healthy development by recognizing the individuality of the children, providing close relationships with other people, encouraging initiative, and being consistent in care and discipline. Five case histories are provided. (RP)