Although computers have been used in education for 20 years in the United States and Europe, they have not been widely used in the less developed countries of the world because the initial investment and operational costs of computers have been too high. Should advances in hardware technology continue to reduce such costs, some educational applications of computers will soon be affordable to less developed countries. In this paper, the current status of educational applications of computers is reviewed with a view toward predicting the direction of such applications in developing nations. An overview of the development and use of computers from the 1950s to the present is provided, and hardware and financial factors influencing the development of educational software are discussed, as well as classification and design principles relating to these programs. Potential problems in using computers in developing nations are described, including (1) the environment; (2) power requirements; (3) lack of human resources; (4) curriculum and pedagogy; (5) high costs of both the initial investment in computers and their operation; and (6) the developmental quality of courseware. Specific areas in which computer-assisted instruction may prove to be cost-effective for developing countries are suggested, and a glossary is included. (Author/MES)