Publisher Summary This chapter proposes a “transactional perspective on human ability” to understand variability in behavior and development in general and applies that perspective to the phenomena of mental retardation. The transactional perspective rests on the three constructs: intelligence, cognitive processes, and motivation, principally task‐intrinsic motivation. Intelligence and cognitive processes are sharply distinguished from each other. Implications of the transactional perspective on human ability are drawn for developmental intervention in the lives of individuals with mental retardation. The transactional perspective fulfills the requirements for new conceptions of intelligence and of mental retardation. The tripartite conception encompasses phenomena that intelligence alone cannot explain, and integrates those phenomena into a comprehensive scheme. Although cognition and motivation are not themselves directly observable, they are no less so than is intelligence. In fact, all three must be inferred from their presumed effects upon other, more directly observable, phenomena, especially the behavior of persons who are thought to vary in intelligence, cognition, and/or motivation. All three concepts are developmental ones, and it is possible to construct and to test models for their ontogenesis, not only separately but also, more importantly, with respect to their transactional effects upon each other and upon developing persons. All three are important individual differences variables that are both dynamic and transactional.