The purpose of this study is to present information that will help educators to gain a better understanding of microcomputer capabilities and limitations and to inform them as to the role of microcomputers in the classroom. Through examination of studies and articles six topics related to computer-assisted instruction (CAI) are addressed: (1) age groups, ability levels, and subjects with which CAI can be used; (2) effectiveness of CAI in producing achievement gains; (3) other effects of CAI on student development; (4) effects of CAI on attitudes of students and teachers concerning computers; (5) advantages of CAI over other methods of instruction; and (6) limitations of CAI. Annotations of the studies, reviews, and articles examined are divided into six main sections dealing with applications, effects on students' academic and personal growth, advantages and limitations of CAI, and suggestions for more effective use of CAI. It is concluded that CAI can become a valuable learning tool that can be used at many age and ability levels, and that it can result in computer literacy and achievement gains, improved self concepts, and learning motivation. It is cautioned, however, that CAI is neither a cure-all nor suitable for all students, but must be considered one of many instructional methods. Based on the findings of CAI research, several recommendations are made for improved needs assessment by schools and teachers, development of computer literacy, and future research. A 67-item bibliography is included. (MES)