The Education Voucher Demonstration is a large-scale educational and social intervention that began in the Alum Rock Union Elementary School District, San Jose, California, in September 1972. First funded by the Office of Economic Opportunity, it is now sponsored by the National Institute of Education. This report describes the development of ideas about education vouchers in recent years, their translation into an operational model, the negotiation of an agreement with Alum Rock for a federally subsidized voucher demonstration, the first year of the demonstration, and Rand's tasks in analyzing the demonstration. Also assessed are the effects of the demonstration during the first year. The study is addressed to educators; policymakers at federal, State, and local levels; and members of the general public who are interested in educational innovations. (Author/JF)