This study examined whether students perform better academically if they are in a multi-ethnic school setting, in the minority in a predominantly single-ethnic school, or in the majority at a predominantly single-ethnic school. The study looked at three ethnic/racial groups: White, Black, and Hispanic; and analyzed urban students' mathematics and reading test scores from the fourth through eighth grade. An analysis of variance was used to assess group differences and compare groups of the same ethnicity who were in different school settings. Data from the state education agency's database for students from 1986-87 through 1990-91 from their fourth through eighth grade years were used. Student ethnicity, gender, age, socioeconomic status, and standardized test scores were evaluated. The results suggest that it may be more academically beneficial to minority students for school districts to emphasize desegregating schools rather than promoting single-race schools. In particular, the study shows that the achievement of Black and Hispanic students is positively affected by the presence of a higher percentage of White students in the school. However, White students are adversely affected by being in schools that are predominantly Black or Hispanic. Includes 36 tables and 17 references. (JB)