Private school regulation is a growing concern among school choice proponents. This paper uses a national survey of private schools to analyze the potential effects of various regulations. More than 1,000 schools answered questions about their willingness to participate in school choice programs if they had to comply with particular regulations. Results revealed that directors of many private schools would rather turn down "free money" than compromise the core qualities of their schools. Different kinds of schools often did not agree on what those core qualities were. The paper examines some economic flaws in school choice programs and explains why limiting student eligibility narrows the market and stunts improvement and why school choice policies must be carefully crafted to consider the dominance and funding structure of Catholic schools. Finally, the paper provides guidelines for school choice policymakers: create broad-based demand; create a wide-open playing field on which schools may differentiate themselves and compete, and eliminate entry barriers to new schools; avoid skewing prices with tuition caps, or non-need-based subsidization; and avoid conflicts of interest between the people paying for education and the parents and children benefiting by creating a system that maximizes direct payment by parents and minimizes coercive wealth transfers through the state. (Contains 68 endnotes.) (SM)