This paper compares the formal and non-formal education systems currently operating in Israel, describing the special features of curriculum planning in non-formal education. The central argument is that the non-formal education system fulfills functions that constitute a critique of the formal education system. The non-formal system offers the opportunity for experimentation with pedagogical methods, knowledge structures, and instructional modes. At a later stage, however, the formal education system may adopt methods developed within the non-formal system. Data were obtained from document analysis, interviews, and observation. Israel has an extensive network of non-school-based education organizations that function as non-formal education organizations. They include such groups as youth movements; community centers; sport and culture associations; museum programs; day care centers; and various support, interest, and action groups. All organizations feature free membership and view education as a lifelong process. The themes typical of non-formal education organizations, which reflect basic conflicts in Israeli society, include: (1) universal versus particularistic elements of the Israeli national identity; (2) secular versus religious definition of the nation; (3) selective versus non-selective approaches to history and the Jewish past; and (4) the Jewish people versus the Israeli state. A conclusion is that the dichotomy between formal and non-formal education makes possible experimentation with methods. curricula, and structure, which serves a critical function. Despite their different ideological positions, conservative formal education and innovative non-formal education enjoy a complementary relationship. Formal education benefits from the experimentation produced by non-formal organizations and, in turn, consolidates the non-formal system. Contains 26 notes. (LMI)