A study described the 1989-90 Chapter 1 Children's Art Carnival Creative Reading program, and assessed the effectiveness of its implementation. The program's primary purpose was to improve literacy through participation in creative arts activities coordinated with instruction in reading and writing. The program served 310 elementary school students at 6 sites in New York City (in Manhattan, Queens, and the Bronx). Data included observations of the program's activities and standardized tests. Results indicated that: (1) the program functioned well on a day-to-day basis; (2) students in grades 2 and 3 surpassed the program's criteria for success in the number of new reading skills mastered; (3) students in grades 2 through 5 made significant gains in reading skills; and (4) approximately two-thirds of the program participants increased writing proficiency, surpassing the program's criteria for success. Recommendations to improve the program include improving the relationship between program and school staff, facilitating teamwork between program staff, continuing to "rework" the program, focusing on lower grade levels, continuing to pursue parental participation, and supporting secondary sites. (Ten tables of data are included; a description of the collection and scoring of students' writing samples is attached.) (RS)