Intended for teachers and administrators, this book examines systematic observation of reading behaviors and reading recovery procedures to help children with reading problems. Part one deals with systematic observation, beginning with a discussion of the reading process and reading programs. Following that, it describes the use of the diagnostic survey--including strategies both for using the "running record" and for testing--and concludes with strategies for summarizing the diagnostic survey results. Part two focuses on reading recovery--a program for early intervention--and includes chapters on organizing to prevent reading failure, reducing reading difficulties with a second chance to learn, understanding the various aspects of the reading recovery program, reading recovery teaching procedures, and deciding when to discontinue children from the program. The final chapter contains summaries of six projects that make up the program and a summary of the entire reading recovery program. The appendixes contain summary sheets, test score sheets, reading recovery teaching sheets (for New Zealand children), and a stanine score summary sheet. (EL)