A history of the development of education in Palau (Belau), the westernmost State in the Caroline Islands, is presented. The Caroline Islands were occupied in 1914 by Japan. The islands were devastated by World War II and 40 years of U.S. administration have not restored the islands to prosperity. Palau was declared a republic in 1986, but legal difficulties with its constitution have impeded the ratification of the proposed Compact of Free Association with the United States. The schools in Palau have followed U.S. curricula. The per pupil expenditure in 1985-86 was $1,462. Schooling is mandatory through grade 8 or until 16 years of age. There is a vocational college with an enrollment of 400 students, a staff of 93, and a library. Teacher education is being upgraded through the assistance of the University of Guam and San Jose State University in California. The paper includes a 24-item list of references to materials on Palau and education in the Republic. (NL)