Summary: Operation Breakthrough was initiated by the Department of Housing and Urban Development (HUD) to improve the process of providing housing for lower income families by demonstrating the value of industrialized (factory built) housing construction methods and by eliminating or reducing barriers to industrialized housing construction. Operation Breakthrough did not prove the marketability of most of its sponsored housing construction methods, but the program has supported some useful changes in the housing industry by exposing builders to new construction methods and materials, exploring new methods of evaluating housing construction, encouraging changes in building code requirements, and supporting statewide building codes. The program did not accomplish its objectives because unexpected decreases occurred in the housing market; HUD subsidized mortgage housing programs were suspended; and some housing systems lacked cost savings potential. Experience gained through Operation Breakthrough indicates that demonstration programs should involve: thorough preliminary work to develop criteria, evaluate proposed approaches, and analyze market uncertainties; feasible strategies to overcome marketing problems; research to resolve technical questions; and planning for program evaluation.