This study investigated the effects of contract grading on motivation and mathematics achievement of underprepared college students. The study also examined the relationship between motivation and mathematics achievement. The expectancy theory of motivation containing the five components anticipated effort, valence of first level, valence of second level, expectancy, and instrumentality provided the theoretical basis for this research. This investigation provided answers to the following questions: Is there a difference in mathematics achievement of students using contract grading as compared to students not using contract grading? Is there a difference in the motivation of students using contract grading and students not using contract grading? Is there a relationship between motivation and mathematics achievement? There were seventy-four students enrolled in the basic skills arithmetic course involved in this study. These students were in attendance at a small, historically black college. The study took place during the fall semester, 1984. Analysis of covariance techniques were used with pretest scores as covariates for posttest achievement and motivation means. Pearson correlation was computed for determining a relationship between motivation and mathematics achievement. Contract grading had a significant effect (p≤.02) on mathematics achievement scores in this study. There was a significant difference between groups on the components of valence of second level (p≤.01) and instrumentality (p≤.03) in favor of contract grading students. There were no significant differences between groups on the components of anticipated effort (p≤-42), valence of first level (p≤.07), and expectancy (p≤.76). Pearson correlation computations found no significant relationship between motivation and mathematics achievement for the contract grading group. Expectancy was significantly correlated with achievement for the noncontract grading group, while the other components were not significant. / Ed. D.