A compelling body of research shows that when students are part of smaller and more intimate learning communities, they are more successful. The latest research demonstrates that small schools, particularly schools of choice, have a measurably positive impact on inner-city students, especially those from minority and low-income families. The tradeoff for the wider selection of courses offered in large schools has been the sacrifice of coherence, intimacy, security, student choice, and teacher autonomy that a small school can offer. In small schools, the level of participation in all activities tends to be higher, and fewer students are marginalized. Research also suggests that restructuring schools can work and that reorganizing schools into smaller units has important benefits for minority and disadvantaged students. Dropout rates appear to decrease as schools get smaller, and the sense of community is enhanced. The experiences of those who have attempted to create smaller schools in the Chicago, Illinois public school system indicate that successful implementation ultimately depends on the adequate accommodation of old and new school structures and on transformation rather than the simple addition of innovative practices. A list of recommended readings is provided to supplement information. (Contains 40 references.) (SLD)