This monograph examines the term "full inclusion" as it pertains to students with severe disabilities; reviews the historical, legal, and policy bases for various models and systems; and considers the implications for policy change of various aspects of full inclusion models. An introductory section identifies key principles of most full inclusion models, including: (1) "home school" placement, (2) natural proportion of disability at the school site, (3) zero-rejection/heterogeneous grouping, (4) age-appropriate and grade-appropriate classroom placements, (5) strong site-based coordination and management, and (6) use of cooperative learning and peer instructional models in the regular education system. The second section looks at the legal and policy basis for full inclusion models and considers such issues as educational goals for students with severe disabilities, extension of the inclusion principle to placement, the consequences of educational isolation, and the meaning of adult status. The third section discusses policy implications of each of the key principles of full inclusion models. The paper concludes that the leading edge of special education policy and programmatic reform for students with severe disabilities involves "full inclusion" models of school organization and the return of categorical programs to the regular school and classroom. A convergence of trends in both special and general education reform movements is seen. (Contains 80 references.) (DB)