High spatial and spectral resolution observations of the atomic interstellar medium in nearby dwarf galaxies reveal evidence for warm and cold neutral gas, just like the phases in our own Galaxy. The cold or quiescent phase (about 20% of the HI in the galaxies studied, except for LGS 3) seems to be associated with star formation activity--- it may mark the regions where the conditions are right for star formation. These results help to explain the patterns of star formation activity which are seen in color-magnitude data for the dwarf irregulars.