This study was commissioned to determine how the Individuals with Disabilities Education Act is working, what outcomes children and youth with disabilities are achieving, and how the system can be improved in the context of current education reform initiatives. Key policy themes addressed include individualized education programs, least restrictive environments, procedural safeguards, and multicultural and multidisciplinary education. Outcomes examined include academic achievement, school and work readiness, quality of life, and minimal instructional time lost. The report then focuses on school reform efforts for various student populations; assesses the impact of such initiatives as work readiness and quality of life; examines student outcomes at present and expectations for the future; and discusses measures and indicators used in educational assessment. Conclusions of the study are expressed in terms of recommendations to the President and Congress, as well as recommendations for parents, practitioners, and other stakeholders in the special education system. (Contains 40 references.) (PB)