Described is a project which relates psycholinguistic processes (reading and listening comprehension) of handicapped children to the training needs of special education teachers through the application of Computer-Assisted Teacher Training System technology in performance based teacher education. The first chapter discusses preservice special education and presents the nine objectives of the project. Chapter 2 reviews the literature and considers implications and conclusions relating to the following topics: interactive teaching behaviors and reading and listening comprehension, language strategies of retarded children, reading studies involving educable mentally handicapped children, reading comprehension and organization in the retarded. Chapter 3 describes the methods used in the project observation system, training materials, coder training, and coder competencies evaluation; tutor background, practicum objectives and tutoring procedures; and teaching phases and experimental design). The results of the project (including 11 tables) are discussed in chapter 4. Chapter 5 summarizes the project in terms of objectives, perspective, methods, data sources, and results, and draws conclusions about the effectiveness of the project. (BD)