This study investigated the relationship between classroom student diversity (how students differ in their attributes, educational requirements, learning styles) and teacher capacity (skills, abilities, knowledge) to student performance in Texas public schools. Teacher ethnicity and gender, class size, and classroom per pupil expenditure were explored to determine what classroom student diversity/teacher capacity combinations could be suggested to maximize overall classroom student performance for kindergarten through sixth grade. Major findings include: (1) teacher certification and written competency exams for elementary certification do not predict teacher quality in the classroom; (2) no differences in classroom student performance exist between teachers with bachelors degrees and teachers with masters degrees; (3) teacher classroom experience is the most important source of teacher capacity; (4) 6 to 7 years of classroom experience are needed to fully develop the skills and knowledge of a teacher, and teachers peak in their classroom effectiveness after 18 to 19 years of teaching; (5) students are systematically assigned to classrooms based on a teacher's tenure, e.g., novice teachers get harder classroom student assignments while more experienced teachers receive easier assignments; (6) Hispanic and African American teachers are able to maximize student performance for classrooms where the teacher's ethnicity is dominant among the classroom student population; (7) a student's socioeconomic status continues to be a major determinant of student achievement; (8) no differences in student performance have been noted among limited English proficiency, English as a Second Language, and regular classrooms; (9) no differences in student performance have been noted between inclusion and non-inclusion classrooms; and (10) a class size of 13 is recommended to maximize gains in student performance; however to expand the use of a teacher's capacity without negative effect to gains in student performance, a class size of 22 is acceptable. Recommendations for educational policy and practices are included with each finding. (ND)