This paper describes the complex environment of federal, state, and independent agencies within which school districts operate, and suggests how these agencies, with their demands and resources, can contribute to school improvement when local decision-makers use them for this purpose. Features of these external governance and support systems are reflected in the school systems; one example cited is the parallel differentiation of spheres of authority in the regulatory and support agencies and of program domains within districts and schools (e.g., compensatory, vocational, and special education). Despite the complex and pervasive influence of these external forces, local decision-makers can work productively with outside agencies, requirements, and resources in the following ways: (1) develop strategies for what they wish to accomplish and how external systems can help; (2) match outside resources to the nature of the planned improvement and to the internal resources available; (3) make sure that external resources and demands result in advancing (or not impeding) school improvement; and (4) attend to advantages and disadvantages of segmenting school improvement efforts. As a postscript, state and federal options for reducing the disadvantages of program differentiation are discussed. (TE)