This chapter of "Principles of School Business Management" examines the legal and policy issues associated with racial and ethnic segregation in the schools, including the issues related to forced busing to achieve balance. The chapter first reviews the impact of "Brown v. Board of Education" and subsequent court cases defining the states' and the schools' responsibilities for implementing appropriate desegregation efforts. Arguments and interpretations of the law made by proponents and opponents of busing under forced or free choice conditions are examined. The distinctions between the "de jure" segregation legislated in the South and the "de facto" segregation practiced in the North are clarified and the different remedies considered and mandated by the courts are discussed. The chapter then examines the application of court-ordered remedies in cases involving neighboring districts, whether well established or newly created to impede segregation. The development of government policy on school desegregation and transportation in light of the court's decisions and local and regional responses is described next. The chapter concludes with a review of the essential purposes behind court actions and of the local district factors affecting the acceptability of district decisions. Over 150 footnotes cite court decisions and other relevant references. (PGD)