The use of seniority in current school layoff and transfer practices and the impact of seniority provisions on school operations are examined in this paper. The data for the study came from two sources: interviews with teachers, principals, union leaders, and district administrators in four school districts (drawn from a national sample) facing enrollment decline and budgetary reductions; and a review of teacher contracts in force in 60 Massachusetts school districts. The paper first discusses the arguments for and against using seniority as a major criterion for actions affecting employees. Explored next are effects, costs, and benefits of seniority policies on teacher layoff, transfer, and bumping in the four districts where educators were interviewed. The role of seniority in industry's employment practices is considered next, for purposes of comparison. The report then identifies the major elements of contract provisions relating to seniority, including criteria for layoffs, layoff units, bumping rights, and other relevant educational factors. The document closes with a clarification of the differences between unions' and teachers' views on seniority rules and an assertion that it is possible to design seniority provisions that do not conflict with the interests of education. (PGD)