This report considers a range of issues involved in doing case-study research with emphasis on the potential for and the problems associated with this approach in distance education. The report begins with an introduction to the case-study research methodology, noting that it is not widely recognized as an approach in distance education. Substantive general issues are identified as ethical issues, problems of validity and reliability, generalizability, and the extent to which case-study research can contribute to the building of theory. Two case studies in distance education are then presented to illustrate different aspects of this type of research, both in the nature of the findings and the theoretical issues involved. The first example looks at the process of developing distance education courses with particular attention to the experience of the Classroom Processes course at Deakin University (Victoria, Australia). The second example is an interview-based evaluation study of the introduction of home computers into an Open University (United Kingdom) second-level course, The Fundamentals of Computing. The more detailed report for the second study covers theoretical perspective; methodology; the types of students (i.e., professionals using computers, students wanting a degree for a job change, women returning to work, students with a general interest in computers, and computer experts); study patterns and coping with the course; and issues of openness and access. The two studies are then compared, and a discussion of the development of theory in distance education concludes the report. (8 references) (DB)