The work completed to date on the development and validation of a procedure for assessing the micro-environments of preschool children is summarized. It was speculated that the lack of evidence that compensatory programs facilitate developmental changes in children might be due to actual lack of influence by the programs, to the subtlety of the influence, and/or the inappropriateness of the conceptual and analytical approaches to the data. The development and validation of the procedure was guided by two sets of hypotheses: that adequately reliable and meaningful factors would emerge from a factor analysis of the micro-environment assessment data, and that the factors would relate to post-test and change criteria, respectively. The children were observed in their natural program environments and the data derived was reduced through factor analysis to individual child environment summary scores. Multiple regression analysis was performed on this data and the above hypotheses were supported. Appendices include the observation recording sheet and data on the intercorrelations and/or factor loadings of 33 environment items, 21 predictor variables, and 8 criteria variables. (PR)