The conditions for effective and efficient provision of distance education in the small-scale integrated mode normal in Australian higher education are outlined in this paper. Criteria for the evaluation of effective distance education are listed as follows: (1) student learning of information and understanding; (2) student satisfaction with the content and processes of the course; (3) retention and graduation rates; and (4) employability or advancement within employment. Efficiency is defined in terms of the relationship between inputs, such as equipment cost and salaries, and outcomes, i.e., educational effectiveness. The impact on effectiveness and efficiency of various approaches to distance education is briefly described for each of the following activities: academic production, materials production, distribution, interaction, assignments and other learning activities, assessment, evaluation, and student support/guidance. Measures that would yield economies of scale are suggested, and difficulties and obstacles to the measures are discussed. (MES)