This wide-ranging discussion begins by briefly reviewing the background of the current small-group movement: what started out as individual therapy eventually led to group therapy. The term "therapy" is now being dropped and small groups are becoming a new, here-to-stay, soial institution. The need for an open, safe vehicle for self-expression is viewed as primary in this age of alienation. Hence, the small group's wide-spread value is of great importance. Throughout the paper, numerous implicit or explicit reasons for the importance of the small group as a solution to social functioning problems are presented. Implications of the small group approach for the therapist are discussed. Various dilemmas concerning the nature and extent of therapist participation are addressed. Mowrer also states his case for a balanced approach to personality problems which include not only a social dislocation etiology (treated best in groups), but also a possible biochemical basis. In summary, the paper argues that peer groups (specifically defined) and medication offer the best sources of therapy for human beings. Cautions in their use are emphasized. (TL)