A 3-year demonstration project at a sheltered workshop has provided prevocational training for 137 mentally retarded young adults, placed 28 of them in industry, and employs 38 in the sheltered workshop. The report includes goals and objectives of the project, project organization and operation, training procedures and techniques, contract procurement, sheltered employment and placement data, community relationship and public education, summary and conclusions, future plans and developments, considerations for the future, and data on finances, contract earnings, trainee characteristics (age, sex, length of training, wages, vocational placement), and a rating scale of trainee employability. (LE)