This assessment of state libraries and suggestions for development are based on conferences with an advisory committee, inquiries sent to state libraries, a literature review, and consultation with the staff of the Office of Education's Division of Library Services and American Library Association. It was found that state libraries play a key role in partnership between local communities, states, and the federal government for library improvement and coordination of services. However, the state libraries cannot adequately meet their responsibilities, none meet minimum A.L.A. standards, and they are held in low esteem by state governments. Limitations include: inadequate service to state governments, insufficient state support, unclear statutory authorization, rural orientation, little research, and a critical need for professional manpower. Recommendations, with many alternative approaches suggested, involve direct categorical aid to state libraries through titles added to the Library Services and Construction Act (LSCA), funds for research and development specialists and service to state government, addition of a title to LSCA for service to the disadvantaged, appropriations for library research and improved coordination, re-examination of state library responsibility, and strengthening the federal government library effort. Appended is the letter of inquiry, the states responding, and an 86-item bibliography. (JB)