On the basis of a comprehensive best-evidence synthesis of the literature on the effects of multigrade and multi-age classes, Veenman (1995) concluded that there were no significant differences between multigrade and single-grade classes in cognitive or achievement effects. Subsequently, Mason and Burns (1996) challenged Veenman's conclusion, claiming that multigrade classes have at least a small negative effect on achievement, as well as having potential negative effects on teacher motivation. Multigrade classes are used extensively within Victorian primary schools, sometimes by choice but at other times as a result of the combined pressures from staff-student ratios and enrollment numbers at particular grade levels. The issue of their contribution to effective learning is thus a critical, practical one, as well as an interesting research question. Analysis of data from the Victorian Quality Schools Project, a large, comprehensive, three-year, longitudinal study of school and teacher effectiveness, revealed some significant negative effects on achievement associated with multigrade classes and some non-significant effects. Results differed between data collection occasions (1993 and 1994) and between subject areas: literacy and numeracy. In order to illuminate the processes at work, the issue of multigrade classes became one of the research questions investigated in the qualitative phase of the project in 1995. Principal and teacher perceptions of the level of learning difficulty in multigrade classes (for all students and for particular subgroups) were sought through interviews, together with information about school policy on multigrade classes and the processes of allocating students to such classes. The results indicate the directions that could be taken to maximize effectiveness of teaching and learning in multigrade classes, as well as directions for further empirical investigation of the effects of multigrade classes on students' learning outcomes. An interview schedule and 15 tables of data are attached. (Contains 25 references.) (Author/RS)