This Annual Report from the National Institute of Justice covers a year in which crime rates continued to drop and many of the Nation's largest cities, which have struggled with high levels of crime for so long, lead the decline. The 1994 Crime Act and the partnerships NIJ has forged with the offices within the Department of Justice that administer the programs under the Act continued to provide opportunities for maximizing the learning process about the innovations now under way. These innovations reflect an exciting trend--the growing commitment to a community-based, problem-solving approach to a safer society. This report describes how in1996 the Institute carried out its mission to provide knowledge to control crime and achieve justice and discusses new and continuing initiatives in NIJ's portfolio of research and evaluation investments.