This report evaluates progress in including children with mental retardation in integrated educational environments and provides detailed tables providing state-by-state comparisons. A prologue by the executive director of The Arc, a national organization on mental retardation, notes that, for children with mental retardation, placement in segregated educational environments continues to be the rule of the land, with only 7.1 percent of such children receiving their education in regular classrooms during 1992-93, up only slightly from the 6.7 percent reported during 1989-90. A large discrepancy between integration data for children with other disabilities and children with mental retardation is noted. Vermont is presented as an example of the successful implementation of inclusion of children with mental retardation. Concerns of The Arc regarding reauthorization of the Individuals with Disabilities Education Act are noted, such as proposals regarding easing of requirements to educate all children and elimination of categorization of disability. The main body of the report has sections which address: principles of inclusion in education affirmed by The Arc; benefits of inclusion; educational environments of children with mental retardation; national changes in educational placements; state-by-state comparison of the use of regular classroom placements; changes in the use of regular classrooms; state comparison of combined regular class and resource room placement; state comparison of overall use of inclusive settings for children with mental retardation;"report card grades" for each state; an overview of findings; limitations of the data; the quality of education received by children with mental retardation; and renewal of The Arc's call to action by the federal government, state governments, local school systems, and chapters of The Arc. (Contains 15 references.) (DB)