Rural elementary school teachers were interviewed to determine their knowledge of student prejudices and how they encouraged acceptance of differences; students were interviewed to determine what prejudices were held. Eight rural teachers and 53 first, third, and fifth grade students in a small northern Rocky Mountain community with no racial, ethnic, or religious minority inhabitants were interviewed. Rural first graders were found to know many ethnic and racial stereotypes, perceived people different from themselves as foreigners, would prefer to play with Anglo American children, and teased about physical appearance and religion. Rural third and fifth graders could not define "prejudice," learned their views from parents/relatives/friends and television, seemed uncomfortable responding to questions about Blacks, and teased about skin color, families, and religious affiliation. Rural teachers took strong stands against classroom expressions of prejudice, but rarely confronted deeply held attitudes, stressed acceptance of differences, and would like to spend more time on citizenship but did not illustrate diversity in American society through teaching materials. Recommendations for addressing prejudice in the classroom included inservice/preservice exploration of personally held prejudices, teaching about discrimination, helping children examine treatment of people who are different, and introducing students to the spectrum of individual differences outside their local community. (LFL)