The Study Group on the Conditions of Excellence in American Higher Education was appointed in October 1983 by the director of the National Institute of Education (NIE) to: (1) review relevant background materials from the archives of the National Commission on Excellence in Education (NCEE); (2) review other background materials in other recent reports; (3) advise the director of NIE on further uses of those materials; and (4) suggest ways in which policy analysis and recommendations for improvement in American higher education can be developed and implemented. This first report presents a general assessment of the background materials, begins the discussions of issues related to excellence in higher education, and makes a limited set of recommendations. Background materials reviewed included those of the National Commission on Higher Education Issues (American Council on Education, "To Strengthen Quality in Higher Education"), the Business-Higher Education Forum ("America's Competitive Challenge"), the National Commission on Student Financial Assistance ("Signs of Trouble and Erosion" and "The Terrain of Postsecondary Education"), and, primarily, the NCEE ("A Nation at Risk"). Areas of inquiry focused on: student clientele; programs and learning environments of institutions; "providers" of undergraduate baccalaureate education; and the external influences on higher education. Recommendations are offered regarding education data collection/analysis, the NIE leadership role in revitalizing the Federal Interagency Commission on Education (FICE) and other areas, and the focus of research at NIE labs and centers. (LB)