This Small Business Innovation Research Phase II project conducted by Goodbyte, Inc. seeks to adapt Object-Oriented Programming (OOP) technology to the construction of computer systems that understand statements and questions posed in natural human language, such as English or Japanese. Previous Natural Language Processing (NLP) systems have suffered from a common scaling problem: As the number of linguistic rules is increased to cover the language more fully, interactions among rules become so complex that the systems eventually collapse. This situation is similar to adding feature upon feature to large software systems. The Phase I studies indicated that OOP concepts, which have been of great aid in organizing conventional software, can be adapted to linguistic rules as well, allowing them to be structured as independent objects with inheritance, while the encapsulation of information within an object holds the promise of extending rules without disrupting previous coverage. With the basic methodology for Object-Oriented Grammars (OOG) now in place, the chief objective for Phase II is to put OOG to the acid test by developing a prototype system with substantive coverage. In the process, the equivalent of an OOP class library will be developed, upon which new NLP applications can be based. It is anticipated that such a class library will allow natural language interfaces to be developed rapidly for a variety of applications, just as OOP and associated visual programming tools have made it possible to rapidly develop graphical user interfaces. Potential applications of a computer system that understands statements and questions posed in natural language include conversational access to information in databases, catalogs, almanacs, encyclopedias, and documents distributed across networks such as the Internet; automatic translation of documents from one language to another; document classification based on content; and automated response to e-mail mes sages, including electronic commerce. In combination with speech technology, the possibilities for machines to converse with people are enormous.