Regional Educational Laboratories were created in the early 1960s as a federally funded link between research and development efforts in education and school districts. The labs were conceived to be sensitive to the practical needs of administrators and teachers for educational innovations that could be implemented locally. However, over a quarter of a century, the labs have been transformed by economic and political dynamics from a focused national network of federally supported, professionally guided knowledge diffusion institutions into nine, often entrepreneurially oriented "job shops," sometimes only remotely related to local school districts, their agendas substantially influenced by federal officials and whatever clients they could gain from marketing activities, and subsisting financially from competitively contested contract to contract. This paper describes the evolution of the Regional Educational Laboratories, paying critical attention to the governmental planning and political forces accompanying their formation. This analysis proceeds by describing the major changes in policy and operation that subsequently have shaped the laboratory system. Assumptions underlying formation of the laboratories are described, and conditions that have consistently curtailed their effectiveness are analyzed. The paper summarizes present laboratory problems and poses alternative strategies for overcoming them in the future. (JD)