This report describes the first year of a 3-year extension of an Office of Education-funded program to prepare teachers and teacher aides to work with exceptional children in the regular classroom. (The final report of the original 1-year project is available as ED 043 598.) The emphasis during the first extension year was on securing greater involvement in the project by the community and closer cooperation between the university and the public schools. Extensive continuing evaluation of all aspects of the project indicated that: 1) children at the laboratory school or in participating districts were getting more individualized attention which served to maintain, if not enhance, self-concepts and achievement; 2) trainees improved attitudes and skills in working with educationally disadvantaged children; and 3) institutional change occurred through curriculum changes, inter-departmental activities, and community involvement. (The progress report includes 20 appendixes which contain the details of the evaluation, forms used in the evaluation, descriptions of practical experiences by teachers involved in the project, lists of staff and trainees, and letters from participating schools and other organizations interested in the project.) (RT)