This report describes the development, design, and evaluation of an online circulation system at the University of Guelph, Ontario. A 1976 study identified the specific problems or inadequacies of the existing circulation system and specified design requirements for a new online system. This 1978 report is divided into six parts: (1) historical background; (2) inadequacies of the off-line batch-mode system including mechanical breakdown, errors, inefficient and costly use of staff, reserve desk, and study conclusions; (3) design requirements for an online circulation system including functional and philosophical requirements; (4) evaluation of alternatives and choice of a system; (5) system design including a description of the design team and philosophy, equipment, and software; (6) functions of patrons and staff in using the GEAC Library Circulation; and (7) implementaton from first semester operation, September 1977-December 1977, to final implementation, January 1978. Numerous figures display actual online system computer screens. An equipment list is appended. (THC)