This longitudinal study attempted to assess how environmental factors affect the development of competence, as defined by White, by delineating in detail the everyday environmental transactions of a group of children from age 1 to 3. The key questions of this research were: (1) Are certain experiences encountered by the young child in his everyday life more important to his intellectual development than others? (2) If so, does the source of these experiences matter? and (3) Is the question of timing important? A total of 23 children were observed repeatedly in their homes and neighborhoods and the observations coded using the HOME Scale. Results confirmed that (1) the class of observed experiences, classified a priori were intellectually valuable to the child, (2) it does not matter how the child's intellectual experiences are derived, and (3) different sources of intellectually valuable experiences become important at different periods in the child's life. It was found that child-person interaction correlates highly with test performance at age 3, modeling becomes important at age 2, and self-directed intellectual experiences become important at age 2 1/2. Investigation of experimental antecedents of the child's spontaneous expression of intellectual competence yielded results which duplicated the findings for tested intellectual competence, with the exchange between child and interactor being most highly related to the child's later intellectual competence. Aspects of the interactive situation and interactor role are discussed in terms of the critical role early interactive experiences play in the child's intellectual development. (GO)