Editors' Summary: Although NEPA has been with us for nearly two decades, the precise extent of the statute's application remains cloudy. The courts continue to struggle with the scope of "Federal action," particularly where proposed federal conduct with little direct environmental effect will make possible nonfederal activities of great environmental consequence. Mr. Ellis and Mr. Smith examine the case law on this issue, identifying two different analytical trends reflected in the various decisions. One of these trends is to analyze the nonfederal conduct as an "indirect effect" of the "Federal action," while the other approach regards the nonfederal conduct as part of the "Federal action" itself. The authors assert that the latter approach is flawed because it fails to strike the proper balance between federal environmental control and unfettered nonfederal decisionmaking, and they carefully examine three recent decisions that can be interpreted as disfavoring that approach.