Chapter 1 of the Education Consolidation and Improvement Act provides local school districts with federal funds to meet the special needs of educationally deprived children in high poverty areas. Because federal regulations provide little guidance for allocating Chapter 1 resources within the districts, distribution formulas vary and so do the type and level of services provided to participating schools and students. This paper addresses three major research questions concerned with the above issue, summarizes methodology (a multiple case study approach), and discusses implications for federal policymakers. As expected, the 17 districts sampled (ranging in size from 2,000 to 300,000 students) concentrated resources differently and also had varying objectives concerning appropriate scope, intensity, and design of Chapter 1 instructional programs. Only one district actually used poverty as a primary allocation criterion. Other variations and possible explanations are discussed at length. Findings provide four lessons for policymakers: (1) variations in program intensity are partly due to design differences; (2) state and local compensatory education influenced Chapter 1 allocations; (3) few districts achieved equitable distribution of Chapter 1 resources across participating schools; and (4) districts face program tradeoffs if Chapter 1 funds are reduced. Included are eight endnotes and nine references. (MLH)