SUMMARY The paper provides survey and intensive research material on the private children's homes sector. It is shown that this sector is currently in decline. Private homes are found to be sheltering children with long and complex care histories and to adopt a distinctive residential style. Although private homes provide valuable long term continuity, they are less likely to offer the same range of community services as do residential settings managed by the local authority and voluntary child care agencies. The private residential child care sector is an area that arouses considerable anxiety. Proprietors of private establishments are often accused of reaping inordinate profits from their activities (Hopkins, 1979; Laurance, 1983) and it is commonly asserted that their practice is inferior to that in the local authority sector. Thus, private children's homes cause considerable professional and political concern, especially as the contentious issues of registration and inspection have recently been the subject of a Parliamen tary Bill. However, the private sector has attracted little research scrutiny and claims of its proponents and critics have not been backed by reliable evidence. For these reasons, we thought it important to explore more systematically the current situation. This paper forms part of a study being undertaken by the Dartington Social Research Unit into children's homes. It is one of the projects in the Social Science Research Council Programme, Children in Need of Care, and arose from concern about changes in the functions of the so-called 'ordinary' children's homes. The traditional long term family group style of children's home is clearly changing as fostering is developed and other specialist establishments, especially for adolescents, are closing. The aim of this research is to chart these changes and to provide new information about the current situation with regard to the characteristics of the resident population, issues of staffing and organizational style. Such research, we believe, will assist with the future planning of services for children in care. From the outset, we felt that it was important to include in the study an examination of private as well as well as local authority and voluntary 0045-3102/84/040347 +14 S03.00 ©1984 The British Association of Social Workers