PROCEEDING ON THE ASSUMPTION THAT PRISONERS CAN BE TAUGHT DEMOCRATIC VALUES BY PARTICIPATING IN A CONTROLLED DEMOCRACY BEHIND PRISON WALLS, A 7-YEAR RESEARCH PROJECT WAS CARRIED OUT AT THE NIANTIC STATE FARM FOR WOMEN IN CONNETICUT. IT WAS FELT THAT RESULTS OF THE EXPERIMENT MIGHT EVEN HAVE SOME SIGNIFICANCE FOR MORAL EDUCATION IN SCHOOLS. A MUTUAL WELFARE LEAGUE EXPERIMENT IN CONTROLLED DEMOCRACY HAD BEEN CONDUCTED IN AUBURN AND SING SING PRISONS (N.Y.) FROM 1913 TO 1916. THE NIANTIC 'JUST COMMUNITY' PROJECT WHICH FOLLOWED THIS EXAMPLE IN THE 1970'S IS DESCRIBED, REGARDING ITS COURT OF INMATE JUDGES, OPEN HEARINGS, USE OF THE APPEALS PROCESS WITH INMATE JUDGES, AND TO EVALUATE THE PROGRAM, A SAMPLE OF 12 INMATES FROM A TRADITIONAL COTTAGE AND 24 FROM AN EXPERIMENTAL COTTAGE (ALL UNDER AGE 24 AND MATCHED AS TO RACE, CRIME, AND LENGTH OF SENTENCE) WERE CHOSEN. TRAINED INTERVIEWERS (SOME, FORMER INMATES) AND SCORERS FROM HARVARD UNIVERSITY USED THE MORAL ATMOSPHERE SCORING SYSTEM AND KOHLBERG'S MORAL MATURITY INTERVIEW TO TEST THE ASSUMPTION THAT PRISON STRUCTURE CAN BE MODIFIED TO BE SEEN BY INMATES AS FAIR AND JUST AND THAT THE LEVEL OF INMATE SOCIOLEGAL THINKING CAN BE HEIGHTENED. FINDINGS INDICATED THAT 75 PERCENT OF THE WOMEN IN THE EXPERIMENTAL COTTAGE AS CONTRASTED WITH 33 PERCENT IN THE TRADITIONAL COTTAGE ACCEPTED THE INSTITUTIONAL POLITICAL STRUCTURE AND DISCIPLINARY DECISIONS AS DEMOCRATICALLY DETERMINED. ANALYSIS OF MORAL JUDGMENT INTERVIEWS INDICATED AN IMPROVEMENT FROM PRETESTING TO POSTTESTING (5 MONTHS APART), AND COMPARED FAVORABLY WITH SIMILAR MORAL EDUCATION EFFORTS WITH NONCRIMINAL POPULATIONS. CHANGES IN MORAL REASONING LEVELS TESTED SIGNIFICANTLY HIGHER IN THE EXPERIMENTAL THAN IN THE TRADITIONAL GROUP. PRELIMINARY RESULTS OF POSTRELEASE ADJUSTMENT SEEM POSITIVE. IT WAS CONCLUDED THAT DEMOCRATIZING THE PRISON SETTING MIGHT FACILITATE MORAL CHANGE AMONG INMATES. EXAMPLES OF STAGES OF MORAL GROWTH (ACCORDING TO KOHLBERG'S THEORY) OF THE INMATES' PROBLEMSOLVING APPROACH IN A COMMUNITY MEETING ARE PROVIDED. TABLES, FOOTNOTES, AND REFERENCES ARE PROVIDED. (FCW)