A "diversity education dilemma" occurs when exposure to information concerning status hierarchies, related to demographic and other socially salient identity groups, reinforces those hierarchies in the classroom. Discussions of diversity-related issues in a variety of management courses (e.g., immigrant issues in labor relations, the composition of executive leadership teams in strategy, workplace compliance issues in human resource management) may highlight or draw attention to status differences as individuals identify with--and are identified by others as belonging to--higher or lower status groups (e.g., based on race/ethnicity, gender, or physical disability). As a consequence, the "real world" status hierarchy is strengthened within the classroom with negative consequences for student learning. This study uses status characteristics theory to provide a framework for understanding ways in which one's best-intended practices may be undermining student learning. The authors also propose a series of practical ways that instructors can mitigate the status hierarchy to create a more equitable learning environment while simultaneously tackling issues related to diversity. (Contains 5 notes and 1 figure.)