This paper reviews the literature on the background, legal process, and implications of the Felix consent decree, a legal settlement in which the State of Hawaii agreed to improve its special education program and to develop a self-sustaining system of care for delivering special education services. The paper begins by reviewing federal laws (the Individuals with Disabilities Education Act and the Rehabilitation Act of 1973, Section 504), the history of the Felix consent decree, the Felix class action lawsuit, and the following court decisions. In addition, the paper examines the impact of the Felix consent decree on the State of Hawaii, its involved state departments, and its public school educational system. Research reviewed covers the status of mental health services, Hawaii's system of care, and other Felix programs. The paper concludes that, as a result of the Felix consent decree, procedural and program changes affecting both regular and special education programs have been implemented. (Contains 49 references.) (DB)