Sixty-four emotionally handicapped elementary school students with no neurological defect or subnormal intelligence were randomly assigned to four experimental regular classes, and two contrast special classes. The experimental classes received a modified curriculum utilizing the simulated environments technique through the unit approach in social studies with primary emphasis placed upon interaction in small group situations. The contrast classes received whatever was available in their schools or individual instruction in a highly structured environment. Results indicated significant differences (p<.01) favoring the experimental groups in interpersonal relationships, personal effectiveness in social situations, and use of problem solving skills. However, there were no differences between regular and special class groups. Improvement was noted in all groups on the behavior scales. The only significant difference in academic achievement was in reading comprehension and favored the special classes (p<.05). It was concluded that the experimental technique has a positive effect on the ability of these children to relate with others and to apply problem solving skills to learning and personal problems. (Author/RS)