At the request of the Committee on Governmental Affairs of the U.S. Senate, this report presents findings of a study to determine the extent to which Title I funds are used to support education or developmentally appropriate activities for preschoolers, and what is known about the effectiveness of Title I-funded programs in preparing preschoolers for school. Data were collected by means of a survey of the 111 largest school districts serving about 25 percent of all public school-aged children nationwide and 400 smaller school districts, interviews with Department of Education officials, review of data on the number of preschoolers served with Title I funds by state, and review of the Department of Education's Strategic and Performance Plans. Findings indicated that during the 1999-2000 school year, about 17 percent of the school districts receiving Title I funds spent an estimated $407 million on preschool services, making Title I second only to Head Start in its level of federal preschool education funding. Districts used their funds to serve an estimated 313,000 preschoolers. Almost all the children were between 3 and 5 years and received a variety of services. Children were served in every state. Although the Department of Education may lack the information to measure Title I's effect on children's school readiness, the Department may be able to structure its design of a planned study to collect such information. The report recommends that the Department explore the feasibility of isolating and measuring Title I's effect on school readiness. GAO contacts and staff acknowledgments are appended. (KB)