This report presents a case study of the investment program to modernize the Soviet textile industry. It examines the flow of information and decisions among the various parties in the modernization effort — the ministries, the users of industrial machinery, and the machine builders. The goal is to identify the way the modernization process is actually proceeding and to determine the likelihood it will provide Soviet industry with more productive equipment. Using industrial journals and secondary source material, the study is divided into four data sections: the central authorities, the textile enterprises, the machine builders, and obstacles to modernization. The study suggests that the poor results of Soviet modernization attempts show that systemic inadequacies make the process of adaptation for efficient utilization particularly difficult in the Soviet setting. Moreover, the major ills affecting the implementation of modernization will not be adequately addressed without a more radical implementation of economic reform.