This study investigated the perceptions of 2,409 7th-12th graders regarding teacher ethnic bias. Participants comprised three groups: school dropouts, students at risk of dropping out, and a control group of students. Students responded to questions regarding teachers' liking of Mexican American students and non-Latino white students. This was done regarding teachers in elementary school, 7th grade, and during the last year. Ethnicity, gender, and school status were the independent variables. Data analysis indicated that ethnic background was the strongest factor influencing students' perception of bias. Mexican American students were more likely to perceive bias than were non-Latino white students. School status was also a significant factor in models predicting perception of high bias. Dropouts perceived high bias more often than did students at risk of dropping out, who perceived high bias more often than did the control group of students. These gaps widened as the students progressed through school. A discussion of implications for teacher education and staff development focuses on assessment of student perspectives, identifying one's own biases, learning by doing, and committing more firmly to multicultural education. (Contains 30 references.) (SM)