This report describes the efforts of the California State Department of Education in response to a 1975-76 evaluation report which indicated that in some schools, third grade reading scores were declining--specifically in schools whose entering students averaged below the twentieth percentile on the 1973-74 Entry Level Test (ELT) after three years in early childhood education. Two research questions are discussed: "What are the characteristics of the schools with students with ELT scores below the twentieth percentile?" and "What circumstances are associated with the decline or improvement in third grade student reading achievement?" The first chapter presents the background information that inspired the studies reported; the second chapter reports on the procedures, sample, and findings from a special case study conducted by the Department of Education; and the third chapter presents the procedures, sample, and findings from a study of classroom instructional processes conducted by Stanford Research International. (HOD)