This paper describes a model for the evaluation of a children's residential treatment center which houses the emotionally disturbed and mentally handicapped. This model is derived from the transactional perspective discussed by Kelly and Newbrough. It suggests that serious consideration be given to those variables, particularly family life style development, which manifest themselves within the community and infringe upon the child's ability to cope within that context. The four areas of data collection for residential treatment program evaluation include: (1) a community baseline relating to the family system; (2) a residential baseline; (3) the child's behavior at the time of discharge; and (4) the conditions present at the time of the child's re-entry. The evaluation theoretical considerations raise a number of questions regarding key points where the study will focus. The procedure to be used in evaluating are briefly outlined. (Author)