In 1999, South Carolina's First Steps to School Readiness was launched as a comprehensive early childhood initiative to improve childrens school readiness by improving the efficiency and coordination of existing services to children from birth to age 5 and their families, and by providing new services where gaps are identified. A legislatively mandated external evaluation focused on the first 3 years of the statewide initiative and included key accomplishments, challenges, and directions for further steps in the areas of administrative structures and collaborative processes, fiscal information, early education, child care, parenting/family strengthening, child health, other programs, and data reporting and evaluation. Main findings of the evaluation include the following: (1) all of the administrative structures legislatively mandated are in place; (2) First Steps adhered to a set of research-supported guiding principles; (3) programs of each type called for in the legislation have been implemented; (4) there was substantial county variation in programs selected for implementation; (5) program quality varied across and within counties; (6) First Steps is engendering a "culture of accountability" regarding expenditures and program implementation; and (7) First Steps has fostered collaboration and built capacity at the state and county levels to enhance services for young children and their families. Recommendations include increased focus on program quality, development of mechanisms to share experiences across counties, continuation of improvements in administrative procedures and requirements, and adequate resources to sustain First Step efforts and to strengthen the quality of programs, data collection, and administration. (Data tables and figures are appended. In addition to the full report are an executive summary and a report providing county profiles. Contains 107 references.) (KB)