This report explores the efforts of the Colorado Department of Education in its Chapter 1 programs in 1994. Chapter 1 of the Elementary and Secondary Education Act is the largest federally funded program designed to provide services to elementary and secondary school students. Chapter 1 provides financial assistance to meet the special educational needs of educationally deprived students who reside in areas with high concentrations of children from low income families. Within a district, funds are provided on the basis of educational need rather than financial need. In fiscal year 1994, Colorado Chapter 1 programs were administered by 100 districts and 9 Boards of Cooperative Educational Services members totaling an additional 75 districts. Staff members totaling 1,758.53 full-time students served 45,918 students in Chapter 1. A state-administered institution for delinquent or neglected children provided services to an additional 411 students. Chapter 1 students are concentrated in the early grades. Chapter 1 dollars per child increased 7.3% in 1994. Most Chapter 1 students received instruction in reading, and greater percentages received mathematics instruction than in previous years. Achievement gains resulting from Chapter 1 services are reported by all districts using a normal curve equivalent scale. Other beneficial program effects are reported in areas such as improved parent participation and reduced retention in grade. (contains 7 tables and 12 figures.) (SLD)