This study examined the impact of diversity on students' self-perceived improvement in the abilities necessary to contribute positively to a pluralistic democracy. It noted how such diversity-related campus activities as exposure to multicultural curricula and opportunities to study and interact with diverse peers affected student development. The study also examined the influence of faculty gender and race/ethnicity on classroom strategies and curriculum supporting diversity. Data came from the 1989-90 Faculty Survey administered by UCLA's Higher Educational Research Institute, which included responses from faculty at 159 predominantly White institutions nationwide. Longitudinal student data were also examined to understand the link between activities associated with diverse students and faculty and student self-reported growth on 20 general educational outcomes. Student responses came from a 1987-91 student survey, also administered by UCLA's Research Institute, which involved 4,253 students from 309 predominantly White, four-year institutions. Data analysis indicated that faculty gender distinctly impacted students in terms of how classes were taught and course content. There was a significant relationship between student growth on various educational outcomes and activities during college associated with having a diverse student body and faculty. (Contains 28 references.) (SM)