This report includes the application for validation, the state review form, and the on-site validation form for a demonstration center based on a computer-managed system of reading instruction. The project seeks to provide locally constructed diagnostic tests, computer-indexed teaching materials, criterion-referenced tests, and periodic summaries of progress for individual students, classes, and schools. The first and second years of the project were used for development and field testing of the various components; the third year was used to implement the program and to investigate its effectiveness. Results from a comparison of 196 pupils from grades 3, 4, 7, and 9 with 143 pupils in control groups are reported for student achievement and attitude as measured by locally developed tests. Changes in teacher competence and attitude are reported for 18 teachers who participated in an inservice training course needed to implement the program. (AA)