Colonias--unincorporated, low-income settlements endemic to the U.S. borderlands--have inadequate infrastructure and dismal living conditions, but also provide a creative solution to the housing dilemma faced by many border families. Colonias are most common in Texas and New Mexico, primarily as a result of weak rural planning laws, and are growing at a rate of about 10 percent per year. Colonias lack water, sewer, gas, and electric lines, but the land is cheap and houses are built piecemeal from available materials. Colonia residents have high rates of tuberculosis, typhoid, and hepatitis and do not have health insurance. Lack of potable water is a major problem. Dropout rates are high, educational attainment is low, and school bus service is not available in colonias. Nevertheless, enrollment at border schools is increasing annually by 5-10 percent, and education is the top priority of colonia residents. Agencies seeking to address colonia problems must form partnerships with residents, sustain agency presence in the community over the long term, and convince residents that agency programs will improve both living conditions and employment opportunities. Strategies are suggested for community outreach, development training, and service delivery. (SV)