A study was conducted to identify the environmental conditions and relationships between external and institutional conditions that have a significant effect upon student transfer activity. A sample of 78 colleges in 15 states were selected from institutions participating in a national transfer project; 42% were located in Texas or California. The study examined institutional characteristics, funding, enrollment, and demographic data; and external factors including state articulation and transfer policies; economic conditions; and proximity of senior institutions to the community colleges. Student transfer activity was measured in terms of credit rate (i.e., the percentage of first-time freshmen completing 12 or more credits during a 4-year period) and transfer rate (i.e., the percentage of first-time students with 12 or more credits transferring to a senior institution with a 4-year period). Study findings included the following: (1) factors associated with high credit rates were high unemployment, low community income, high percentages of full-time faculty, high tuition, low enrollments and high percentages of younger and full-time students; (2) high transfer rates were correlated with high community income, high percentages of full-time faculty, low per student expenditures, high percentages of younger and white students, and high percentages of students with 12 or more credits; and (3) formalized statewide articulation mandates had a moderate positive effect on transfer rates, while the close proximity of a senior institution had a moderate negative effect. (JSP)