The Tesseract Schools in Baltimore City are nine public schools operated by The Alliance for Schools That Work, an association of for-profit businesses. This document contains findings of a program evaluation of grades 1-5 conducted by the University of Maryland at Baltimore City. The study compared seven Tesseract elementary schools with a matched group of seven Baltimore City public schools. Outcomes information was derived from school records for the 1991-92 through the 1994-95 school years. Process information was obtained during the 1994-95 school year from classroom observations; questionnaires completed by teachers, parents, and fifth-grade students; and interviews with principals, teachers, interns, and other staff members. Findings indicate that the percentage of students eligible for Level IV special-education services in Tesseract schools declined by two-thirds over the 3-year period. The program was effective in raising Comprehensive Test of Basic Skills (CTBS) test scores in some schools but not in others. Maryland School Performance Assessment Program (MSPAP) scores for 1993-94 were similar for both groups of schools; however, they were below the results for Baltimore City and well below the results for Maryland. In 1994-95, class size was similar for both groups. Also, ratings of overall effectiveness was similar for both groups. The per-pupil cost for 1995-96 in Tesseract schools will be 11.2 percent higher than for comparison schools. Over 3 years, scores for Tesseract students decreased and then increased to about the pre-program level. Appendices contain school-by-school data tables and copies of the classroom observation form, teacher and student questionnaires, and the parent telephone survey. (LMI)