This paper reviews what is known about the effects of prejudice and discrimination on the urban housing market. Particular attention is given to distinguishing the effects of prejudice from the effects of discrimination. Theories about prejudice and discrimination in the urban housing market are reviewed and tested against available evidence. Information considered includes evidence about racial residential segregation, black-white price differentials in housing, types of housing consumed by blacks and whites, and home ownership patterns of blacks and whites. Summarizations of nine studies in particular provide information about three aspects of the pattern of housing prices: (1) the relationship between racial composition and the price of housing; (2) the black-white price differential within neighborhoods; and (3) the black-white price differential between neighborhoods. Suggestions are made for public policies that would help eliminate discrimination and promote integration in the housing market. (Author/EB)