This report on options for developing the University of California (UC) MELVYL online library system discusses the system in relationship to the current environment, including national and network information resources, electronic publishing, campus libraries, and changing user expectations; and places the growth of the MELVYL system in the context of overall planning for the development of the university's automated information systems. Objectives underlying continued development of the system are proposed, including growth of the catalog and periodicals databases; loading of abstracting and indexing databases; access to electronic journals, reference sources, a directory of databases, and specialized databases; an integrated view of information resources available to the UC community; data coordination; and creation of a workstation environment. Implications of the objectives for database acquisition, computing and network resources, investment in workstation technologies, staffing, and the MELVYL system as an information utility are summarized; and an overview of the technical evolution of the MELVYL system is provided, including standards, interfaces, and hardware. Five graphs presenting 1990 and 1991 use statistics are included, and a diagram of the system is appended. (KRN)