The early literacy challenge in Indiana is to increase the literacy skills of students in Grades K-3 who are at risk for school failure. In 1997 the Indiana Department of Education began implementing the Early Literacy Intervention Grant Program (ELIGP)--close to half the ELIGP funding supported professional development for teachers and teacher trainers involved in Reading Recovery. The remaining schools had projects referred to in this impact study as Other Early Literacy Interventions (OELI). Examples of OELI projects funded included Four Blocks, Literacy Collaborative, Success for All, and other locally developed interventions. This impact study includes: a summary of the implementation study; an analysis of the impact of ELIGP, focusing on changes in early reading and literacy programs that resulted from ELIGP funding; an examination of a select group of case studies that illustrate the role of ELIGP in the school improvement process; an analysis of the impact of funding on the number of students completing Reading Recovery, special education referrals, and retention; and recommendations for enhancement of ongoing efforts to improve early reading and literacy in Indiana. Contains multiple tables of data and figures and 33 references. Appendices contain the survey instrument; outlined features of early literacy programs; lists of funded programs; summaries of early literacy intervention programs; policy news; and notes. (NKA)