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Education plays an important role in community development initiatives. A movement toward an increased linkage between the two arenas has emerged. Two major theories undergird this movement: economic/investment and the ecology of community revitalization. The Clinton administration's Empowerment Zone/Enterprise Community program offers a concrete example of a community development initiative. Preliminary reports on educational components from sites nationwide are highlighted. In addition, a review of the literature reveals several major issues that surround these community development activities, including values conflicts, economic sustainability, school improvement, trust, and administrative issues. Overall, the purpose of this paper is to bring into focus the major theoretical and practical issues that community development efforts confront in attempting to improve the lives of Americans in need.