In this comprehensive review, important studies from the literature relevant to the impact of ability grouping on students are summarized. The following are considered: the effect of heterogeneous and homogeneous grouping practices on academic achievement and affective development; the tendency of ability grouping to produce separation of students along ethnic and socioeconomic dimensions; and the relationship between these dimensions and achievement on tests used to classify children. It is concluded that grouping practices based on standardized tests not only tend to restrict the quality of the instructional experiences of children with respect to academic and social learning, but also, as a result of ethnic and socioeconomic separation, tend to restrict the overall range of experiences and learning opportunities available in the classroom. The report concludes that ability grouping per se is generally ineffectual in improving academic achievement. An extensive bibliography is provided. See TM 000 501, 503, and 504 for other parts of this report. (PR)