A method of interaction analysis in which the individual student is the unit of analysis in classroom studies is needed to complement traditional studies treating the class as the unit. Such a method would add information concerning intra-class variation in teacher-pupil interaction patterns. Treatment of the studied are properly conceptualized as interactions between the teacher and the class as a group; and (2) teachers are consistent across students in their classroom behavior so that individual differences within a classroom are of little or no importance relative to intra-class differences. In fact many coding categories are most properly conceptualized as interactions between teacher and individual student. Within-class group and individual differences of considerable importance are regularly found when investigators look for them. Use of the individual student as the unit of analysis constitutes a more powerful method of examining the relationship between previously studied teacher behavior variables and student performance measures. It also allows interaction analysis techniques to be used on problems and variables not previously studied. Practical application of the improved method has been achieved in a study designed to identify and measure the behavioral mechanisms underlying the transmission of teacher expectancies for children's performance. (Author/JS)