This study examines the effects of recent statewide education reforms on small, rural schools in 13 Appalachian states. Education reform measures passed in the Appalachian states during 1982-1987 focused on improving schools through the following major approaches: (1) increased accountability through testing students and changing accreditation standards for schools; (2) higher minimum standards in schools and mandated curriculum improvements; (3) changes in teacher compensation, certification, and professional development; (4) new programs to improve administration and leadership; (5) mandated programs for special populations; and (6) increased state aid and changes in financial aid formulas. Forty-seven responses from a mail survey of 114 rural school districts and interviews with 80 state policymakers and local education officials indicate that (1) reform implementation has stretched the administrative and financial capacity of rural school districts; (2) new curricula requirements have forced innovative approaches such as teacher sharing between districts and the use of technology in classroom instruction; (3) student test scores have improved over the past four years, but dropout rates remain high; (4) programs for special populations have added to the resources of rural schools; and (5) despite large increase in state aid to rural school districts, school improvements have required increases in local financing as well. Appendices outline the research methodology, summarize education reforms enacted and implemented in each of the 13 states since 1982, present the survey results, and include the interview questions. The report contains 88 references. (SV)