The major portion of this presentation describes research results and policy implications of the Family Matters Project, a longitudinal study of social contexts as they affect children and families during the period of transition from home to school. Also provided in this portion are highlights of what was learned from delivering to 160 families (varying in ethnicity, income level, and family structure) a parental empowerment program involving home visiting and neighborhood cluster building. The remaining part of the paper describes participating families' feelings about conditions since the 1980 Presidential election and traces present and anticipated developments in the Family Matters Program. Reported results focus on mothers' perceptions of their children, stresses on working parents, the influence of social networks on the lives of parents and children, the neighborhood as a context for childrearing, and the transition of the child from home to school. Policy recommendations center on changing the workplace to reduce stresses on parents, the importance of opportunities for parents to make friends, and ways of neutralizing constraining forces of neighborhoods while mobilizing their enabling forces. In addition, a new philosophy for the provision of support to families, growing out of the Family Matters Project, is described. Throughout the presentation, effects of income on families are emphasized. (RH)