Following recent thinking that sees organizations' structures as dependent on their environments, the authors consider characteristics of institutional sectors that affect the organizations arising within them. They first point out problems in present models relating organizations to their environments and discuss several "forerunners" of their proposed model. They begin their presentation of their own model by defining an "institutional sector" as a domain identified by similarity of service, product, or function. The authors then describe four sets of characteristics of institutional sectors and suggest 23 hypotheses about them. The first set of characteristics involves the distinction between technical (or market-run) sectors and institutional sectors (in which rules and requirements predominate). Six hypotheses regarding organizations in these two types of sectors are listed. The second characteristic comprises the sector levels--including national, regional, or local levels--on which an organization operates; one hypothesis is presented. Sector decision-making processes, on funding or program matters, constitute the third set of characteristics. Eleven hypotheses are generated regarding decision-making centralization, fragmentation or unification, and substance (whether deciding core or peripheral matters). The fourth set of characteristics and the final five hypotheses involve sector controls, including structural, process, or outcome modes of control. (RW)