The relationship between physical environment and child development was examined in five groups of moderately to severely handicapped children (hearing impaired, vision impaired, orthopedically impaired, speech impaired, mentally retarded). The 282 participating children comprised 89 infants (ages 0-3), 108 preschoolers (ages 3-6), and 85 elementary school children (ages 6-10). Each child's family was visited twice (18 months apart) at home and assessed using sociodemographic indices, the HOME Inventory, a parental coping scale, a social support inventory, the Family Inventory of Life Events, the Scales of Independent Behavior, and either the Bayley Scales of Infant Development or the Stanford-Binet Intelligence test. Results indicated that there was a high degree of specificity between the type of handicap and age and the development of handicapped children. Availability of materials was only slightly related to behavioral development in infants but more significant in overall development of preschool and elementary school age children. Significant correlations were most frequent for orthopedically and speech impaired children's motor and social development, while no significant correlations appeared for the mentally retarded in any developmental area. Findings also indicated that general surroundings in which a child lives were essentially unrelated to behavioral development for handicapped children ages 0-10. (VW)