The first of five sections in this report places intelligent computer-assisted instruction (ICAI) in its historical context through discussions of traditional computer-assisted instruction (CAI) linear and branching programs; TICCIT and PLATO IV, two CAI demonstration projects funded by the National Science Foundation; generative programs, the earliest application of artificial intelligence in education; mathematical models of learning; and recent developments such as dialogue-based tutorial systems. The second section describes ICAI systems and their components, i.e., the expertise module and types of knowledge representation schemes; the student module; and the communication module. Several examples of ICAI systems--SCHOLAR, WHY, SOPHIE, BUGGY & DEBUGGY, GUIDON, WEST, and GEOMETRY TUTOR--are presented in the third section, and the fourth looks at major themes in ICAI research and the current capabilities of ICAI systems. The fifth section discusses the potentials of ICAI for education and its implications for teachers, students, administrators, and researcher/developers. (77 references) (MES)