The second of a two-volume report on the study of sex equity in classroom interaction presents three chapters that detail the use of the APPLE observation system used in the study, describe student and teacher measures, and present data related to gender differences in teacher-student interaction. The two-year study (1980-82) involved 38 fourth- and fifth-grade classrooms in two districts in California and Connecticut. A total of 356 boys and 359 girls served as target students during the first year and 132 boys and 139 girls served as target students during the second year. Over 8,500 student hours of observation were augmented by in-depth interviews with teachers who participated in the study. In addition, an APPLE observation system was used as the study's major tool for observing and preserving classroom processes for analysis. Data from the study do not support the notion that classroom teachers play a major role in creating and maintaining inequities. Despite findings that boys are more disruptive (and thus receive more teacher attention), data suggest that teachers respond to the nature of the student behavior rather than to student gender. Findings concerning peer interaction showed that despite an overwhelmingly strong same-sex preference on the part of both boys and girls, the students actually engaged in cross-sex interaction quite frequently and with no observable consistent differences from same-sex interaction. Eleven appendices, comprising over half of the report, consist of an APPLE observer manual, a lexicon of APPLE terms and numeric codes, observation sheets, data tables, and measuring instruments and instructions. (LH)