In an era when the U.S. educational enterprise, particularly in mathematics, physical sciences, and engineering, has been found to be seriously flawed and has come under criticism from many different sectors, it is essential for science and mathematics educators from the nation's predominantly undergraduate institutions to take the lead in confronting the issues and setting a new course for strengthening undergraduate science and mathematics. This report presents the goals of Project Kaleidoscope as well as a plan of action for the decade of the 1990's to meet these goals. The plan contains four major initiatives which involve changing undergraduate science and mathematics education through continued dialogue and partnerships between funders, policy makers, and science and mathematic educators. Specifically, the initiatives propose: (1) reforming the introductory course in undergraduate science and mathematics; (2) supporting the integrated teacher/scholar role of undergraduate science and mathematics faculty; (3) making disciplinary content and active learning central to the education of K-12 teachers of science and mathematics; and (4) developing partnerships focused on strengthening undergraduate science and mathematics. It is emphasized as well that in each of these initiatives, careful attention must be paid to underrepresented groups in science--women, minorities, and handicapped. Recommendations corresponding to each of these initiatives are given, and to illustrate the report's analysis of "what works" in this endeavor, a number of strong programs that address well-defined needs in liberal arts institutions are described. Chapters in this report include: "Forming Natural Science Communities,""Learning Science," Mathematics: The Foundation of Science,""Human Resources,""Faculty: Building a Community," and "Facilities: Supporting a Community." (PR)