A study assessed the operation of the Adult Education Act State Grant Program to provide an analytic description of the state-administered program with emphasis on program participants, and to identify a set of impact measures that can be studied in a longitudinal design. A core study was conducted based on data from site visits, and seven survey instruments obtained information from state and local level project administrators, teachers, and students. Survey respondents included 404 local project directors, 434 teachers, 436 community representatives, and 1177 project participants. Federal and state-level operations, local project resources and administration, instruction at adult education projects, participant-related characteristics, participant views of the program and its benefits, and special features of the program in the commonwealths and territories were evaluated. Data revealed that the program is benefiting a reasonably large number of adults at a remarkably low federal cost. The study did, however, reveal a need for clarification of the program's intended target population, more innovative and aggressive outreach and coordination efforts, more appropriate institutional settings, increased teacher recruitment and training, expanded supportive services, and greater assistance to the states in the area of planning. (MN)