Provided is the revised and updated version of a report on the effects of physical environment on the learning behavior of 13 institutionalized moderately and severely retarded individuals (14 to 18 years old). An introductory section covers the need for research in enviornmental control, study objectives and procedures, methodology, and hypotheses tested. Examined in a review of the literature are such aspects of architectural design as furniture, space, color, and light; and covered are details of lighting and behavior studies not included in the original report. A section on methods and procedures covers information on the Ss, apparatus, lighting, color, space density, procedure (which entailed the manipulation of four environmental conditions), and the recording of two types of behavior (on-task behavior and ambient-task movements). Among the effects reported from manipulating color, space, lighting, and space-color were that ambient behavior associated with hyperactivity was not increased by color change and that space reduction resulted in increased on-task behavior. The results of a questionnaire survey involving interior designers, architects, and special educators are also provided in the form of guidelines for designing an appropriate physical environment. Also included are numerous references, tables, and diagrams. (IM)