This report describes a demonstration project in which service contracts were used as part of the caseworker approach to increase the effectiveness of foster care for children. The service contracts involved formal or informal agreements defining expectations for performance on the part of the children in foster care, the foster parents, and the natural parents. Although the project initially recommended written contracts between all parties, verbal agreements were found to be preferable in actual practice. Iowa social workers were randomly selected and were trained for participation in the project. A sample of 52 children under 18 years of age, but old enough to understand the service contract, was admitted to the project. A matched group of children in foster care was also identified for comparison purposes. At the end of the project, 46 of the 52 project children were out of foster care. The average length of stay for children in this group was 9.4 months. For the matching group the average length of stay was 11.7 months. Two factors were identified as contributing to the decrease in length of time in foster care for the project children: the work with the natural parents; and the continuing training for workers in general social work practice during the period of the project. (JMB)