Homeless families with children constitute the fastest growing segment of the United States homeless population. This study evaluated Year 2 of the Arizona Head Start for Homeless Children and Families Project, designed to meet educational and social needs of homeless children and families, and to assist Head Start agencies in developing effective models of service delivery responsive to homeless families. The project was implemented in 1994 in Phoenix with 25 children, most of whom were current or former residents of a homeless shelter where the Head Start classroom was implemented. Four Head Start program components were modified to meet their needs: (1) education; (2) family development, involving a family advocate to link families with social services and job and educational opportunities; (3) health; and (4) parent involvement. Evaluation results indicated that children developed on a high percentage of the developmental tasks in each domain. Progress was made in providing children with needed health and dental services. Transitional activities and strategies were developed and implemented. Focus groups and interviews with families showed improved communication between children and adults. In many cases, families made steps toward self-sufficiency. The family advocate expanded the network of service providers and families used services at a high level. Personal support systems implemented during Year 1 continued to benefit staff during Year 2; Head Start staff and management developed strong skills in working with homeless children and families. Strategies contributing to the program's success and barriers to effective service delivery were identified, and recommendations made to improve the program. (Three appendices include a sample of the Homeless Family Database; Database Coding Guidelines; and database summary statistics. Contains 11 references.) (Author/KB)