Alternative care arrangmente such as Daycare Centers, supplementinghome care were developed in recent years throughout the world, to meatthe needs of families with young children and working mothers, as wellas those of families supported by the welfare system. Many studieshave investigated the effects of (high quality) Daycare on the develop-ment of young children. Some of these investigations demonstrated theeffects a? the physical and social environment on the behavior ofchildren, as well as caregivers, in Daycare Centers.Thus several studies examined the effects of a Center setting (groupsize, space, noise, adult-child ratio, amount and type of play equip-ment) very little is known on the effects of another, very com''cn carearrangement - Family Caycare (FDC). In this arrangement, the home of acaregiver is used as a care-setting for 4-7 children. The aim or thepresent study is to investigate the effect of the physical and socialcharacteristics of this unique setting on the behavior of children andcaregivers.