This paper reviews the history of contrastive analysis (CA) against the background of its objectives and its present problems and presents an outline of procedures which seem to be necessary to make the methods meet the objectives of applied CA. CA in the United States was closely connected with structuralism, which was an obvious cause for later criticism. The culminating point came at the Georgetown Roundtable in 1968, after which American CA slowly died out. Interest was revived in Europe, however, particularly in Germany, Poland, Yugoslavia, Romania, and Hungary. The main areas of CA which have caused criticism are the following: (1) relevance for language teaching; (2) structuralism and CA; (3) the turmoil in the theory of grammar; (4) the theory and methodology of CA; and (5) the nature of the criticism. CA must be expanded beyond contrasting grammatical elements to contrasting elements of communicative competence. The communicative approach in language teaching necessarily leads to contrastive discourse analysis. CA will have to be expanded in the following areas: (1) linguistic research (in phonetics, syntax, semantics, lexicon, text); (2) psycholinguistic research; and (3) contrastive sociolinguistic studies. (Author/CFM)