A study determined the initial success of the Compacted Approach to Reading (CAR) program as measured at the end of the program's pilot year. Subjects were 21 first graders and 7 second graders in Tennessee identified and recommended by their first and second grade classroom teacher. The CAR program was developed based on concepts observed in the highly successful, but expensive, Reading Recovery Program. The program uses a small group setting for instruction, intensive instruction, direct instruction emphasizing reading strategies to get beginning readers involved with books and language, intervene before reading difficulties become self-esteem problems, bring students' reading performance up to the average range for their classroom settings, and prevent the early labeling of children and the stigma attached to the labeling process. Students' pre- and posttest data were used in the analysis. Results indicated that the program was effective at the first grade but not the second grade level. The early intervention program was implemented again the following year for first grade students. (Contains nine references, 2 tables, and 4 figures of data.) (RS)