The report examines the status of handicapped children in Project Head Start for the 1981-82 year. Chapter 1 presents background information, including an overview of Head Start policies on services to handicapped children. Chapter 2 reviews data collection measures and summarizes findings regarding the number of handicapped children enrolled and types and severity of handicaps. Among findings reported are an increase of 4,561 children serviced, a decrease in the percentage of multiple handicapping conditions from 1981 (21.5%) to 1982 (18.3%), and at least one handicapped child enrolled in 98% of all Head Start programs. Chapter 3 presents data on services to handicapped children, specifically outreach and recruitment, diagnosis and assessment of handicapped children, mainstreaming and special services, and coordination with other agencies. The final chapter presents a 10-year profile of ways in which Head Start has served handicapped students. Trends are discussed, including increases in special outreach and recruitment efforts to enroll handicapped children, consistent patterns in types of handicaps served (speech impaired children have comprised the largest percentage of handicapped children since the first year), and overall, a steady growth in the number of handicapped children served by Head Start programs and in the services provided to them. Appended materials presents survey results of the number of handicapped children in Head Start by state or geographical entity. (CL)