This study examines a number of questions surrounding the distribution of Title I aid and state compensatory education aid. The extent to which the two types of aid are complementary and their effect on the equalizing thrust of the state general aid are also examined. There are four major states that are studied: Florida, New Jersey, New York, and Texas. The findings indicated that Title I aid, state compensatory aid, and state general aid did not all flow in the same manner to all school districts. In addition, as Title I aid increased in a school district, the average Title I expenditure per pupil increased and the number of Title I eligible students served also increased. Districts receiving the greatest Title I disbursements had the lowest median family income. Districts that received high levels of state general aid tended to differ from high Title I aid districts in a number of general characteristics. Finally, state compensatory education and Title I aid tended to flow in large part to the same school districts. The primary finding supported by this study is that categorical compensatory education aid from State or Federal sources studied enhanced educational expenditure equity in the states. (Author/AM)