The paper describes a systematic observation instrument designed to describe settings in which young children and adults interact. The Early Childhood Setting Observation Instrument (ECSOI) provides a comprehensive matrix of categories useful in describing and analyzing adult-child interactions. Adult behavior categories included in the matrix are: reporter, manager, extender, observer and socializer. These categories are crossed in an interaction matrix with four child behavior categories: verbal pursuit, environmental pursuit, attention pursuit and passive-non-pursuit. For each category of the instrument a description of intent, a general description of the category behavior and numerous examples of behavior are included. An extended example is given of a supervision strategy for field experiences of early childhood students which utilizes the ECSOI as the primary observation tool. Components of the supervision strategy are: (1) the development of a common language for supervisor and student to describe adult-child interactions; (2) on-site observation; and (3) individual conference and supportive feedback. (Author/MS)