This review of the literature of the effects of the physical setting on instructional goals posits that the physical setting in which instruction occurs will affect learners' behavior, whether or not it is intended to. These effects occur in two ways--directly, by the behavior the setting allows, and indirectly or symbolically, by the messages the setting communicates about what behaviors are permitted, how important learning is, and what the roles of the learner and the teacher should be. Teachers, trainers, and instructional designers should consider the direct and indirect effects of various spatial arrangements and determine which formations will maximize the effectiveness of the designed instruction. Environmentally competent teachers and designers consider what learners will be doing, i.e., whether they will be reading or writing independently or engaged in cooperative learning activities, watching a videotape, or collaborating in pairs at a microcomputer. Then they design a physical arrangement that supports these activities, making environmental design an integral part of their instructional design. (19 references) (BBM)