The 1965-1968 progress report of the Western States Small Schools Project focuses on the problem and challenge posed by small schools, which have thus far lacked the depth of resources compared to urban schools. The goals of the project are to assist small schools to: (1) provide individualized programs of career selection education; (2) develop methods and techniques of preschool education to overcome cultural disadvantages prevalent in isolated communities; and (3) develop the organizational and instructional patterns essential to successful programs of continuous progress and individualized instruction. Each objective is presented in a separate section with description of the problem involved, methods or programs, evaluation, and observations. Included are several guidelines for educational activities related to individualized instruction which free the teacher to plan curriculum and choose materials. A chapter is devoted to 2 learning theories with practical application to individualized learning by both students and teachers. (CM)