THE RELATIONSHIP OF ENVIRONMENT AND THE DEVELOPMENTAL PROCESS OF THE BEGINNING SCHOOL CHILD WAS EXPLORED. MORE SPECIFICALLY, THE OBJECTIVES OF THIS RESEARCH WERE TO DESCRIBE THE MAJOR DIMENSION THROUGH WHICH ENVIRONMENT IS LIKELY TO INHIBIT DEVELOPMENT AND TO SPECIFY THE AREAS THAT HAVE BEEN MOST INFLUENCED BY UNFAVORABLE ENVIRONMENTAL CIRCUMSTANCES. OVER 100 IDENTIFIABLE VARIABLES CONCERNED WITH SUCH FACTORS AS HOME BACKGROUND, LANGUAGE FUNCTIONING, INTELLIGENCE TEST PERFORMANCE, READING, AND GENERAL ORIENTATION WERE ASSESSED. THE POPULATION STUDIED INCLUDED A CORE SAMPLE OF 292 CHILDREN WITH A RELATIVELY WELL-BALANCED SAMPLE OF NEGRO AND WHITE, LOWER- AND MIDDLE-CLASS CHILDREN. ONE OF THE MAJOR IMPLICATIONS WHICH AROSE CONCERNED THE IMPORTANCE OF "CUMULATIVE DEFICIT PHENOMENON" WHICH TAKES PLACE BETWEEN THE FIRST AND FIFTH GRADES. THE DATA INDICATED THAT BEING LOWER-CLASS AND/OR NEGRO CONTRIBUTES TO LOWER LANGUAGE SCORES. IT WOULD APPEAR THAT 4 YEARS OF A SCHOOL EXPERIENCE ADDED ON TO A POOR ENVIRONMENTAL BACKGROUND, PLUS MINORITY STATUS, PRODUCES CHILDREN WHO ARE LESS CAPABLE OF HANDLING STANDARD INTELLECTUAL AND LINGUISTIC TASKS. IT MIGHT BE POSTULATED THAT WHEN A NEGRO CHILD BROADENS HIS ENVIRONMENTAL CONTACTS BY GOING TO SCHOOL, HE IS MADE MORE AWARE OF HIS INFERIOR CLASS STATUS, AND THIS HAS A DEPRESSING EFFECT ON HIS CLASSROOM PERFORMANCE.