In 1988, the United States Congress passed legislation that created the School Dropout Demonstration Assistance Program (SDDAP). The program provides funding for local educational agencies, community-based organizations, and educational partnerships to establish effective programs to identify potential student dropouts and prevent them from dropping out and to encourage youth who have already dropped out to re-enter school. This report, the first of two volumes, presents findings of a two-part evaluation to assess the effectiveness of dropout-prevention strategies used by the 89 projects that were awarded grants. Data were collected through annual surveys of all SDDAP projects and indepth studies of activities and achievements at 15 selected project sites. The report identifies the organizational characteristics of effective dropout programs and the program strategies that were most effective in preventing students from dropping out of school and in encouraging dropouts to reenter school. Outcomes for elementary, middle, and high school students are described. The following recommendations are offered: (1) use individualized strategies in regular classrooms instead of pull-out programs; (2) deliver the special services in unobtrusive ways; (3) deliver the special services within a supportive climate that includes adults as student advocates; (4) provide students with substantive incentives to participate; and (5) carefully select, train, and support service-delivery staff. (LMI)