In an era of accountability for educational performance, community colleges should know whether student success is influenced by hiring racially diverse employees. Student interactions with diverse individuals improve student achievement on key performance indicators. This correlational study expands the limited body of knowledge on the relationship of employee compositional diversity to student completion within associate's degree-granting institutions in a single geographic region that exhibits significant racial and ethnic variability. The racial and ethnic diversity at public two-year community colleges was examined in relation to IPEDS graduation rates and a state-level measure of the graduation rates of all students. The multicontextual model of diverse learning environments (MMDLE) informed the research design. A single state system was sampled to eliminate a limitation in previous research using national samples that did not account for the structural diversity of differing state policies. Race/ethnicity data and graduation rates were obtained from NCES and the US Census Bureau. Racial and ethnic diversity of faculty, staff, and students at North Carolina community colleges and the residents in the colleges' service areas was described by frequencies and measures of central tendency. Pearson product-moment correlation and hierarchical blocked multiple regression analysis identified the relationships. Two research questions asked about compositional diversity and whether there were differences in the racial and ethnic heterogeneity of the faculty, staff, students, and the service area residents. The open-door of community colleges resulted in diverse students at each college. Service area residents were nearly as diverse as students. Faculty were the least diverse group, and staff were more like faculty. Some colleges had no diversity of employees. A diversity index was used to compare differences in the heterogeneity of the groups. The compositional diversity of employees differed from that of the students and the service area residents. Full-time staff had a narrower range of diversity scores; students had the broadest range across all colleges. Regional differences in diversity were consistent with theoretical expectations based on the history of the state. The socioeconomic conditions of the region served and whether colleges hired at-will were criteria of the historical legacy of inclusion at the colleges that were hypothesized to affect the diversity of employees. Employment-at-will did not change employee diversity as opposed to hiring employees under contracts. The final two research questions asked whether relationships exist between racial/ethnic diversity and graduation rates and whether institutional characteristics account for the correlations shown in previous research. The diversity index is not supported by the results as a reliable measure to test the relationship between diversity and graduation outcomes under the MMDLE. Results obtained using percentages of racial/ethnic categories revealed the need to understand the relative proportions of race and ethnicity to describe the influence of cross-racial interactions. Moreover, simple correlation analysis was insufficient to isolate variables that affect the relationships between racial/ethnic diversity and graduation rates. Using hierarchical blocked multiple regression to explain graduation rates, regressors were added to control for institutional characteristics and then to identify the relationships with faculty and staff diversity. The location of colleges and the diversity of students and service area residents were institutional criteria of the historical legacy of inclusion. The analyses showed that, when the percentages of Black or African American faculty are higher, Black or African American students graduation rates are higher and White students graduation rates are lower. Further research is needed to understand the relationships of employee diversity with the success of part-time students and high school students enrolled in college. More research may also determine if staff diversity is related beyond the diversity of service area residents. [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone (800) 1-800-521-0600. Web page: http://bibliotheek.ehb.be:2222/en-US/products/dissertations/individuals.shtml.]