The previous report started with optimistic remarks about the increasing importance of the study of interstellar matter in astronomy. This trend has largely been confirmed in the 1985-87 period and it is clear that the subject of our Commission is one of the most active fields of astronomical research. This is also shown by the rapidly growing number of members and by the constitution of new working groups. The major new event in the period has undoubtly been the availability of IRAS data.