This case study was prepared in conjunction with a Unesco survey of its member states concerning educational services for individuals with handicaps. The report discusses Yugoslavia's special education policy, legislation, administration and organization, special educational provision, finance, research and development, voluntary organizations, parents, and issues. Education of handicapped children and youth in Yugoslavia is conceived as a part of a single educational system based on the assumptions that: (1) education must as far as possible be adapted to each individual's potentialities and limitations; (2) handicapped children and youth must be offered some form of education as early as possible; (3) handicapped children and youth must participate in appropriate educational activities; and (4) educational aims are the same for both handicapped and non-handicapped students. While the report notes that facilities provided to ensure a normal life for the handicapped are inadequate, improvements in the field of special education are outlined. (JDD)