The systematic variation of galaxy colors and types with clustering environment could either be the result of local conditions at formation or subsequent environmental e †ects as larger scale structures draw together galaxies whose stellar mass is largely in place. Below redshift 0.7 galaxy luminosities (k-corrected and evolution compensated) are relatively invariant, whereas galaxy star formation rates, as reÑected in their colors, are a "" transient ÏÏ property that have a wide range for a given luminosity. The relations between these galaxy properties and the clustering properties are key statistics for understanding the forces driving late-time galaxy evolution. At z D 0.4 the comoving galaxy correlation length, mear 0 , sured in the CNOC2 sample is strongly color dependent, rising from 2 h~1 Mpc to nearly 10 h~1 Mpc as the volume-limited subsamples range from blue to red. The luminosity dependence of at z D 0.4 is r 0 weak below in the R band, although there is an upturn at high luminosity, where its interpretation L * depends on separating it from the relation. In the B band there is a slow, smooth increase of r 0 -color r 0 with luminosity, at least partially related to the color dependence. Study of the evolution of galaxies within groups, which create much of the strongly nonlinear correlation signal, allows a physical investigation of the source of these relations. The dominant e †ect of the group environment on star formation is seen in the radial gradient of the mean galaxy colors, which on the average become redder than the Ðeld toward the group centers. The color di †erentiation begins around the dynamical radius of virialization of the groups. The redder-than-Ðeld trend applies to groups with a line-of-sight velocity dispersion, km s~1. There is an indication, somewhat statistically insecure, that the high-luminosity galp 1 [ 150 axies in groups with km s~1 become bluer toward the group center. Monte Carlo orbit intep 1 \ 125 grations initiated at the measured positions and velocities show that the rate of galaxy merging in the km s~1 groups is very low, whereas for km s~1 about 25% of the galaxies will merge p 1 [ 150 p 1 \ 150 in 0.5 Gyr. We conclude that the higher velocity dispersion groups largely act to suppress star formation relative to the less clustered Ðeld, leading to "" embalmed ÏÏ galaxies. On the other hand, the low velocity dispersion groups are prime sites of both strong merging and enhanced star formation that leads to the formation of some new massive galaxies at intermediate redshifts. The tidal Ðelds within the groups appear to be a strong candidate for the physical source of the reduction of star formation in group galaxies relative to Ðeld. Tides operate e †ectively at all velocity dispersions to remove gas-rich companions and low-density gas in galactic halos. We Ðnd a close resemblance of the color-dependent galaxy luminosity function evolution in the Ðeld and groups, suggesting that the clustering-dependent star formation reduction mechanism is important for the e...