Over time, compensatory education has become an increasingly institutionalized and effective Federal program, characterized by the following: (1) cooperation; (2) mutual accommodation on the part of national, state, and local officials; (3) ready acquiescence to Federal guidelines at the state and local level; and (4) shared responsibility among professional administrators at all levels of government. Mutually accommodating intergovernmental relationships are founded on interdependence: Federal agencies have crucial legal and fiscal resources; locals have the operational capacity without which nothing can be achieved. The program is a product of a broad social movement with both national and local adherents. Cooperative relationships in compensatory education emerged gradually. Between 1965, when legislation authorizing the program was enacted, and 1981, when Congress modified many of the law's statutory requirements, the program evolved through three distinct phases. Originally it was little more than a vague expression of a general Federal commitment to help educate those in poverty. By the early 1970s the program had acquired a well-defined set of rules and guidelines that many state and local officials had difficulty understanding, to say nothing of implementing. Eventually, Federal, state, and local policymakers worked out their differences so that by the early 1980s a stable set of expectations concerning program operations emerged. Data are presented on three tables; a list of references is included. (BJV)