Conditions under which the use of small groups in classrooms can be productive are suggested in this paper, which moves beyond the general question of small-group learning effectiveness. Part 1 offers a review of recent studies of interaction in cooperative groups, focusing on the following themes: interaction and achievement; task and interaction; the helpfulness of helping; interdependence and interaction; and reward interdependence. The second part examines factors affecting interaction, which include structuring the interaction, ensuring equity, and classroom influences. Implications for staff development and school organization are discussed in part 3, which examines the problem of assessment as a cross-cutting issue. A conclusion is that the central research question is"What kinds of interaction are necessary for different kinds of outcomes?" Research should take into account the following group conditions: task, solution, structure, and division of labor. Teacher training and followup are recommended for the utilization of cooperative learning. (106 references) (LMI)