The major objectives of the subject project are to demonstrate the technical and economic viability of commercial production of lightweight aggregates (LWA) and ultra-lightweight aggregates (ULWA) from slag and to test the suitability of these aggregates for various applications. The project goals are to be accomplished in two phases: Phase 1, comprising the production of LWA and ULWA from slag at the large pilot scale, and Phase 2, which involves commercial evaluation of these aggregates in a number of applications. In the current reporting period, test work focused on Slag III lightweight aggregates. The following was accomplished during this reporting period: (1) Laboratory testing of expanded Slag III for the lightweight block application was completed satisfactorily. The block production run has been scheduled for 11 June 1998. (2) Testing of expanded Slag III made from 50/50 Slag III/clay for the roof tile application was completed satisfactorily. Specimens with a strength of over 5,600 psi were produced. (3) Commercial production and economic evaluation of the expanded slag in panel application was initiated per user request. (4) Additional batch testing for nursery applications has been initiated.