Program manipulation is the task to perform transformations on program code, and is normally done in order to optimize the code with respect of the utilization of some computer resource. Partial evaluation is the task when partial computations can be performed in a program before it is actually executed. If a parameter to a procedure is constant a specialized version of that procedure can be generated if the constant is inserted instead of the parameter in the procedure body and as much computations in the code as possible are performed. A system is described which works on programs written in INTERLISP, and which performs partial evaluation together with other transformations such as beta-expansion and certain other optimization operations. The system works on full LISP and not only for a "pure" LISP dialect, and deals with problems occurring there involving side-effects, variable assignments etc. An analysis of a previous system, REDFUN, results in a list of problems, desired extensions and new features. This is used as a basis for a new design, resulting in a new implementation, REDFUN-2. This implementation, design considerations, constraints in the system, remaining problems, and other experience from the development and experiments with the system are reported in this paper.