The makeup of student bodies in higher education has become more diverse, but students tend to be clustered in segments of the postsecondary system and in various levels and fields. Many campuses do not effectively integrate students who are different. Institutions that are successful in this area tend to: (1) focus on student success and provide the tools for success; (2) enhance coordination and articulation with other educational levels; (3) dedicate resources to fostering acceptance; (4) have access to good information on institution and students; and (5) have leaders in the faculty and administration who provide direction for these efforts. Transformation of the institution into a system that is organized for diversity means addressing a number of issues, including faculty and staff diversity, institutional mission and values, educating for diversity, dealing with conflict, the quality of interaction between students and faculty and institution, and the perceived conflict between quality and diversity. Institutions and policymakers can take these steps to respond to diversity: undertaking comprehensive institutional assessment and cross-institutional research, coordinating among sectors, increasing the numbers of students entering teaching, involving organizations successfully meeting the challenge, improving access, providing sustained commitment, and providing leadership. (MSE)