The paper presents an evaluation to determine the effectiveness of small student learning groups and, moreover, to identify factors that contribute to small group learning in the overall flexible modular plan. Fifteen schools comprising a total of 91 small groups using flexible modular schedules participated in the study. Techniques to determine group effectiveness included: 1) classroom observation of behavior to gather data on student satisfaction, talk, participation, and involvement; and 2) administering of a questionnaire in addition to ten scales of the Learning Environment Inventory (LEI) to small groups by teachers. The criteria of effectiveness are expressed in both judgmental and observational terms. The findings show that there is no correlation between group effectiveness in relation to optimism class size, sex of teachers, mod length or number of mods, and little relationship between the observational criteria and students' perception of classroom environment. However, the findings do indicate that small groups are likely to be effective when they indicate high cohesiveness, satisfaction, goal direction, and democracy, while at the same time possessing the characteristics of low friction, cliqueness, and organization. (Author/SJM)