The study documents what happened in 10 rural communities when a federal educational funding program (Experimental Schools) in 1972 provided 5-year grants for demonstration projects designed both to improve the school system and, through the schools, to address a variety of community needs. The study employs two strategies to document the ways in which a community's characteristics both influence and are influenced by rural development programs. First, it examines how various community characteristics enhanced or constrained the planning, development, and implementation of these programs and the ultimate effects of the programs upon both schools and communities. Second, it explores three concepts concerning the nature of rural communities: the existence of unique prototypes of rural communities; the nature of an underlying social system operating in many rural communities; and the role of various sectors of the community as these contribute to the development process (including local government, housing, the economic base, employment, social services, health, and family life). A sophisticated model developed to guide the research synthesizes theories and methods from social science theory, rural development policy, program evaluation, and operations research. Findings offer implications for educational investment programs, rural development policy, and social research and theory. (NEC)