The processes by which teachers communicate differential performance expectations to different children were investigated through an observational study of dyadic contacts between teachers and individual students in four first-grade classrooms. Teachers ranked children in the class in order of their achievement. Two observers using an interaction analysis system recorded interactions between each teacher and each of three boys and three girls high on her list and three boys and three girls low on her list. Differential teacher expectations for different children were associated with a variety of interaction measures, although many of these relationships are attributable to objective differences in the behavior of the children. However, other differential teacher behavior was observed which is not attributable to objective differences among the children and which is consistent with the hypothesis that differential teacher expectations function as self-fulfilling prophecies. The teachers demanded better performance from those children for whom they had higher expectations and were more likely to praise such performance when it was elicited. In contrast, they were more likely to accept poor performance from students for whom they held low expectations and were less likely to praise good performance from these students when it occurred, even though it occurred less frequently. (Author/JS)