This two-part report focuses on progress made by the Appalachia Educational Laboratory (AEL) during the first year of a 5-year contract. AEL's mandate is to work with educators in ongoing research and development-based efforts to improve education and educational opportunities in Kentucky, Tennessee, Virginia, and West Virginia. Part I: "Overview of the AEL Regional Educational Laboratory--FY 91" contains two sections. Section A focuses on perspectives from a governance and management point of view. Section B summarizes the goals, work, and accomplishments of eight lab programs. In Part II, "Fourth Quarter FY 91 Report of Laboratory Performance," six AEL tasks are discussed: (1) development of effective governance, management, and planning systems; (2) assisting efforts to improve educational outcomes, especially for at-risk students; (3) conducting applied research and development; (4) collaboration with other agencies; (5) conducting evaluation; and (6) improving linkages between early childhood education and early elementary school. Three appendices provide: a graphic display of AEL staff contacts with clients for FY 91; Fourth Quarter Program Advisory Committee Meeting Summaries; and AEL's certification that 25 percent of expenditures for this contract year were utilized for the Improvement of small, rural schools. An "Interim Report of the FY 91 External Evaluation of AEL" is attached. The report, which consists of a case study of the Cabell County, West Virginia public school district, was written for the AEL by Michael C. Reed and William Wiersma of the Evaluation Center, Western Michigan University. (LL)