This report contains research findings on student achievement and retention at New York City alternative high schools serving dropouts and potential dropouts. After a summary and introduction, statistics are presented which reveal that alternative schools facilitate positive changes in student performance. Next, reasons for students' dropping out are discussed, and factors which influence the holding power of alternative schools are described. Differences in students' academic preparedness and the types of school programs are cited as major reasons for the fact that some schools show a higher rate of student retention. A summary of major findings is presented, with particular focus on the dropout problem. Finally, a model for establishing alternative schools (or refining existing ones) is described, and this study's principal recommendations are outlined. Methodological procedures used to collect and analyze the data contained in this report are detailed in five appendices, including a three-page interview format. (KH)