Grades awarded to secondary school students in the Cleveland (Ohio) public schools were analyzed to determine relationships between grades and selected school climate variables in a desegregated urban school district. Failures or F grades and schoolwide non-promotion rates were both related to rates of class attendance and school suspensions. Over three fourths of school failure rates was explained by the attendance rate, suggesting that improving school attendance may reduce failures. The proportion of white students in a school appeared to be a factor related to the failure rate; as the proportion of whites increased (numerically the minority), the failure rate decreased. This finding supports the argument for desegregation. Schools with high failure rates significantly differed from those with low failure rates on such variables as attendance rates, non-promotion rates for the total population, for blacks and for whites, reading test scores, the discrepancy between minority reading scores and white reading scores, suspension rates, average grades by subject, and percentage of each grade awarded. Results indicate a need to introduce changes, such as improvement of class attendance, maintenance of racial balance, and establishment of performance standards in these schools. (MJL)