A study was conducted to document how 10 teachers of preschool handicapped children make decisions related to Individualized Education Program (IEP) development and revision, monitoring of pupil progress, and instructional modifications. Information also was obtained about exit criteria for students in programs for preschool handicapped children. Extensive interviews of teachers indicated that they are involved in IEP development and revision, with revisions influenced by pupil progress on IEP objectives. Student progress typically is evaluated through informal behavioral observations rather than through systematic and continuous measurements of performance. Few teachers have time for evaluation built into their schedules, even though most feel it would be advantageous. Program exit, either to a regular education program or to other special education programs, most often is based on chronological age or attainment of age-appropriate or kindergarten level skills as judged by teachers. (Author/CL)