Findings of a study that examined patterns of minority employment among elementary and secondary teachers in public and Catholic schools in six San Francisco Bay area counties are presented in this paper. Using an open systems model of service delivery, the study assessed the ability of the model to explain variation in minority teacher employment across public and Catholic schools. Two variables defined the institutional environment of schools: sectoral and intergovernmental. The three environmental variables included student segregation, employment growth, and targeted aid. Regression analysis was conducted on 1981-82 data on public and nonpublic schools in six Bay area counties. Findings indicate that client characteristics (the racial composition of schools) influenced the employment of Black and Hispanic teachers more strongly in public than in Catholic schools. Most employment gains were made in large public schools with higher proportions of minority students. Implications are that the trend toward block grants may dampen the positive employment effects of previous categorical funding, and that urban schools may be confronted with a "crisis of legitimacy" if the political dimensions of the teacher-student relationship are ignored. Two figures and three tables are included. The appendix contains statistical results. (Contains 53 references.) (LMI)