This unit of the Flexible Learning System (FLS), is designed to help adults working with children aged 4-8 achieve an optimal classroom arrangement for a variety of activities and child groupings. The unit focuses on the interaction between space, materials, classroom activities and educational goals, and is particularly appropriate for educators interested in providing an open education setting. Section I describes six basic classroom areas in terms of 12 variables covering size, boundaries, materials, working surfaces, and functions. The relationship of these variables to classroom operations and the solution of management problems through classroom arrangement and modification of the six basic areas are explored. Section II provides an illustrated and descriptive guide to physical facilities and resources. Topics covered are: storage, working surfaces and seating, the floor, raised work and play platforms, enclosed areas, room and area dividers. A reference list of publications, films, and additional resource addresses is included. Each chapter contains a topic introduction, learner-activities, and a follow-up discussion. Learner-activities include classroom observations, simulation and decision-making problems. Activity forms are provided for recording activity results. Related FLS units: "Managing the Preschool Classroom"; "An Introduction to Early Childhood Education." (Author/SB)