The proper selection of light-generation and detection components, and systems, is crucial to the proper operation of a quantum-cryptographic system. The detection system proposed in the PHASE I final report will be designed to be sufficiently sensitive so as to detect the slight disturbance caused by the eavesdropper. The light-generation system proposed will be designed to create photons whose quantum states are sufficiently well known so that disturbances caused by the eavesdropper can be distinguished from variations of the state inherent in the photon-generation mechanism. Our PHASE I objective will be to determine design criteria in the photon-generation and detection systems to be used in quantum cryptography.