This final report describes the rationale, goals and activities of a federally funded project that was designed to develop a model intervention program for hospitalized chronically ill children between birth and five years. The focus of the program was to promote optimal emotional development: attachment, separation, individualization, and socialization. A multidisciplinary team consisting of a pediatrician, a psychologist, child development specialists and volunteers worked together with 46 children and their families. The children were provided with play activities, peer interactions, and a consistent daily caretaker. Parents joined as partners in working with their children, and hospital staff responded with enthusiasm, participation, and an increased number of referrals to the program. The program developed a curriculum with print materials, slides and videotapes for hospital personnel, covering the major areas of emotional and cognitive development, information on how to work with parents and siblings, and helpful approaches to commonly encountered problems. This report also includes a description of challenges encountered by the project, information about the study group at the beginning and end of the intervention, and a review of dissemination and continuation activities. Appendices include: (1) Project devised/adapted measures; (2) Presentations; and (3) Publications. (SG)