This report was submitted by Education Turnkey Systems, Inc. and its subcontractor, Kirschner Associates, Inc. and key University of Maryland and other consultants in response to the needs of the National Institute of Education as specified in the Request for Proposal "to develop a Design to Study Individualized Instruction, as part of a general study of compensatory education activities". The ultimate purpose of this two-phase effort is to provide both Congress and NIE with policy-relevant information on the effectiveness and effects of well-implemented individualized math and reading programs as they compare with similar standardized programs. In light of the findings which arose during the design phase, it is stated, two additional major study objects are proposed: (1) to determine the relative cost-effectiveness of the process dimensions of individualized instruction and (2) to determine the degrees to which potentially well-implemented programs are implemented during the period of observation and in turn, the relationship between degrees of implementation and program outcomes within and among programs. The proposed sampling design requires data from approximately 800 classrooms with equal or proportional representation in each of four categories, defined, for example, by whether or not specific performance objectives are assigned to each student. (Author/JM)