The authors stress the importance of providing severely handicapped students with concurrent, systematic, direct, and individualized instruction both in school and nonschool environments within daily or weekly time intervals. A brief historical review of educational service delivery models for the severely handicapped is provided. These include: (1) no schools; (2) segregated private schools; (3) segregated public schools; (4) regular, but chronological age inappropriate, schools; (5) chronological age appropriate regular schools in accordance with the natural proportion; and (6) chronological age appropriate regular schools in accordance with the natural proportion and instruction in nonschool environments. Discussed are the educational implications of such learning and performance characteristics of the severely handicapped as the number of skills that can be acquired, the number of instructional trials needed to acquire skills at meaningful performance criteria, instructional inference (transfer of training), skill complexity, retention-recoupment, synthesis skills, and generative skills. The authors compare four instructional location strategies (school instruction only, consecutive instruction in first the school and then the nonschool environments, concurrent instruction in both environments, and nonschool instruction only in appropriate natural environments). For students under the age of 18 concurrent instruction is recommended, though older students should receive most or all of their instruction in the nonschool environments in which the student is expected to function. (CL)