Over the last 30 years, California has changed from a predominately white society, with small pockets of Mexican Americans and other minorities, to a society that is one-third ethnic minority. The State educational system has been unable to respond adequately to the needs of non-white students, especially those with poor or inadequate English skills. The achievement gap between rich and poor, and minority and majority, makes neither educational, economic, nor political sense and conflicts with the basic values of the nation. Educators and institutions must regard closing that gap as one of their foremost responsibilities. Changes made will improve education for all students. This report lays out the elements of a strategy to link excellence and equity by drawing on resources inside and outside the schools. The report describes and focuses on the following: (1) demographic trends in California; (2) the educational experience of poor and minority students at various levels of the State's educational system; (3) schools, programs, and practices that have demonstrated success in improving achievement among minority and poor students; and (4) principles and strategies that can be used by educational leadership, schools, communities, parents, business and the media to improve educational results. The text is augmented by numerous tables and figures and illustrated with black and white photographs. (PS)