The effect of a major success-failure symbol in the school and source of both teacher and student expectations--homogeneous ability-grouping--was studied via a true experiment. Four hundred and twenty-one black high school and junior high school students in a suburban-city school system were arbitrarily and without fanfare moved up to the next higher ability group while 384 comparable students were retained in their assigned groups as controls. Of those moved up, 54 percent were subsequently recommended by their teachers for the higher group as compared to one percent of the controls. Experimentals also achieved higher scores on standardized achievement tests. Thus, grouping assignment was shown to affect teacher expectations and student performance. (Author/JM)