The paper interprets the legal meaning and application of the "least restrictive environment" (LRE) principle in the education of handicapped, and particularly deaf children. The role of the Department of Education in interpreting the intent of the Education for All Handicapped Children Act, is reviewed with emphasis on the "core value" of LRE. Also examined is congressional intent in the original law. Federal court interpretations of LRE are examined including the following cases: Roncker v. Walter, A.W. v. Northwest RI. School District, and Geis v. Bd. of Education. Specific decisions on LRE and deaf children reviewed include Springdale School District v. Grace, and Visco v. School District of Pittsburgh. The paper stresses that the goal of educating students in the least restrictive environment should be secondary to the goal of providing an appropriate education that meets the unique needs of each handicapped child. (DB)