In 1986, Congress passed Part H of P.L. 99-457 (the Education of the Handicapped Act) to address the educational, social, and health needs of handicapped and developmentally disabled infants and their families. Since this population's needs could not be addressed independently, each state was expected to develop collaborative organizational structures and processes through appointment of an Interagency Coordinating Council. Relatively autonomous state and local agencies were now being asked to become interdependent and establish ways to share or reallocate existing resources. The study summarized in this report examines the ability of state agencies to collaborate and factors contributing to interagency effectiveness. Over an 18-month period, 3 interagency units within a single state were examined: (1) the Interagency Coordinating Committee; (2) the Interagency Placement Committee (for coordinating placement of acutely disabled children); and (3) the Interagency Committee for Children with Special Needs. The interagency units were analyzed according to eight effectiveness factors: objectives, policies, structure, resources, loyalty, agreement, decision-making, and personnel roles. They were also ranked on a continuum of cooperation-coordination-collaboration. The first two units were judged as effectively collaborative; the third was considered dysfunctional. Findings show that collaboration is not always an appropriate interagency strategy. Other conclusions are discussed at length. (MLH)