Are most charter schools more racially segregated than traditional public schools (TPS)? How do local circumstances affect the degree to which charter schools are more racially segregated or diverse than TPSs? As the charter school movement in Michigan and nationwide gains popularity, these questions have become important policy issues. In order to begin to answer these questions, this brief uses Michigan's student-level data for the 2003-2004 school year to group charter schools according to student residence and carefully compares charter schools and TPSs according to the racial diversity of the TPSs from which charter schools draw their students. Several key findings emerge from this analysis: (1)Although charter school students were more racially diverse at the state level than those in Michigan's TPSs, not all charter schools are more diverse; (2) Depending on where their students come from, charter schools had very different effects on racial segregation. Charter schools drawing students mainly from the districts in which they are located tended to be more racially segregated than their host districts, while charter schools drawing students from outside the host districts show some positive evidence toward racial integration; and (3) The effects of charter schools on racial segregation vary across districts depending upon their degree of racial segregation. While charter schools drawing students from segregated districts show no further racial segregation, charter schools drawing students from racially diverse districts are more segregated than these districts. It is concluded that if diversity in charter schools is an important goal for policymakers, the state legislature and charter school authorizers could encourage charter schools to adopt racial integration as a major goal of their recruitment process. (Contains 7 tables and 3 footnotes.)