(abridged) The systematic variation of galaxy colors and types with clustering environment could either be the result of local conditions at formation or subsequent environmental effects as larger scale structures draw together galaxies whose stellar mass is largely in place. At z~0.4 the co-moving galaxy correlation length, r_0, measured in the CNOC2 sample is strongly color dependent, rising from 2/h Mpc to nearly 10/h Mpc as the volume-limited subsamples range from blue to red. The luminosity dependence of r_0 at z~0.4 is weak below L_ast although there is an upturn at high luminosity where its interpretation depends on separating it from the r_0-color relation. The dominant effect 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 field toward the group centers. The redder-than-field trend applies to groups with a line-of-sight velocity dispersion, sigma_1>150 kms. There is an indication, somewhat statistically insecure, that the high luminosity galaxies in groups with sigma_1<125 kms become bluer toward the group center. We conclude that the higher velocity dispersion groups largely act to suppress star formation relative to the less clustered field, leading to ``embalmed galaxies. The tidal fields within the groups appear to be a strong candidate for the physical source of the reduction of star formation in group galaxies relative to field. Tides operate effectively at all velocity dispersions to remove gas rich companions and low density gas in galactic halos. Given that much of the field population is in groups we suggest that this suppression may be the dominant galaxy evolution force at low redshift.
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