Product development has emerged very recently as an area of specialization within the field of education, having received its greatest impetus with the establishment of the federally funded educational research and development centers in 1964 and the regional educational laboratories in 1965. The first part of this three-part document defines development as "the systematic use of knowledge and understanding gained from research and directed to the production of useful materials, devices, systems, and methods; such work includes the design, testing, and improvement of prototypes and processes." The second part identifies and discusses some essential differences between educational research and product development (in terms of orientation, role of the individual, visible results, and codification systems) and some essential relationships between the two. Part 3 identifies and explains ten steps involved in the systematic approach to the development of an instructional product that has demonstrative effectiveness and represents a solution to a crucial educational need. These steps are discussed under the following headings: (1) formulation, (2) instructional specifications, (3) development of evaluation instruments, (4) development of learning materials, (5) pilot test of prototype materials, (6) learning materials revision, (7) product integration or packaging, (8) product field test stage, (9) product revision, and (10) product review and process evaluation. (JES)