To determine whether mainstreaming affects the nonhandicapped student's cognitive schema of the handicapped, a story about a physically handicapped boy was read to 28 fourth grade children in a mainstreamed classroom and 29 nonmainstreamed children. The 10 characteristics attributed to the handicapped boy in the story (acquisition items) and 8 novel characteristics (distractor items) were included in the subsequent recognition memory task. The number of errors made in the memory task reflected the extent to which the acquisition and distractor items were compatible with the Ss' handicap schema content. The closer the Ss' schema content approximated the social stereotype of the handicapped, the more errors they committed. The mainstreamed Ss made significantly fewer errors on the recognition memory test, thus confirming the prediction that mainstreaming results in a less stereotypic handicap schema among the nonhandicapped students. (Author)