  We investigate the effects of hidden matter condensation on supersymmetry
breaking in supergravity models derived from free fermionic strings. We find
that the minimum of the effective potential in the modulus direction depends
strongly on only one parameter which is fixed by the hidden sector. For
nonpositive values of the parameter the potential is unstable which constrains
realistic models severely. For positive and decreasing values which correspond
to more and/or lighter hidden matter, $T_R$ increases whereas $T_I$ is periodic
and depends on the parameter very weakly. Supersymmetry can be broken in the
matter direction with a stable vacuum only if the fields which give mass to the
hidden matter are light and have modulus independent Kahler potentials. Then,
for a wide range of model parameters, supersymmetry is mainly broken by hidden
matter condensation in the matter direction rather than by hidden gaugino
condensation in the modulus direction.
