The theory upon which this study is based led to four predictions: (1) the small number of pupils in small schools creates opportunities to develop close teacher-pupil relationships and enables teachers to consider pupils' individual needs; (2) small schools can provide opportunities for fruitful co-operation among staff and, consequently, create opportunities to establish clear aims for the school; (3) the existence of multi-grade classes in small schools calls for teaching approaches especially suited for such classes; and (4) small communities can facilitate relationships between teachers and parents and thereby enrich the curriculum through the detailed knowledge about pupils that teachers can garner from parents. The sample consisted of all teachers in 17 small schools in north-east Iceland. On the whole, the results of this study suggest some flaws in these schools that may have considerable consequences for pupils. The results indicate that the predicted advantages of the small schools are not being utilised. (Contains 10 tables.)