The report describes a study which looked at two-way interactions among teachers and severely physically disabled and nondisabled children who were followed from kindergarten through first grade. Seven of the children had cerebral palsy and one a muscular disorders. Data collection included direct classroom observation on 74 days; interviews with administrators, parents, teachers, and aides; and evaluation of such historical documents as newsletters, student progress reports, school handbooks, and student placement forms. The report also provides discussion of social relations inherent in mainstreaming practices; a description of the study school; school structure and function; decision making process (how participants manipulate organizational structure); student placement procedures; educational planning procedures; ongoing institutional support; federal, state, and local contexts; effects of values, resources, and integrative mechanisms on classroom integration; the school as policy director; the case for cooperation; and the district/community as supporters. School systems need to ask the following questions: (1) Does the program provide the widest range of alternatives possible? (2) Is there a balance of alternatives? (3) Do program alternatives and balance of alternatives maximize individual student abilities and minimize differences? (DB)