The research was conducted between December 2000 and April 2001 and focused mainly on markets for heroin and crack-cocaine. The study identified the extent of local drug market activity, examined how markets affected disadvantaged neighborhoods, and investigated how local agencies and communities responded to drug markets. The neighborhoods targeted for the study were among the 10 percent of most deprived neighborhoods in the country according to the Index of Multiple Deprivation. Interviews in each neighborhood were with front-line staff of agencies involved with the drug problem, residents who knew about the drug market and its impact on the area, and small groups of drug users. The study found that heroin was widely available at all sites, and crack was widely available at most. All the markets were described as "vibrant" and "busy." Closed markets (only for known buyers and sellers) predominated. The drug markets contributed to the undermining of community confidence regarding safety and well-being and damaged the reputation of the neighborhood. The drug markets obstructed attempts at neighborhood regeneration. The study recommends that strategies for countering drug market be developed locally based on local information. Further, there should be greater coordination of local action within Drug Action Teams and local partnerships. Local enforcement activities, including civil enforcement and the need for better police/community relations, require more resources. More resources are also needed for local drug treatment services; this should include better targeting of groups that are not currently being served adequately. Drug education and prevention should be better integrated with other education initiatives. 1 table and 3 references