This paper reviews the principal literature on schools and communities to find evidence that schools perform community-shaping functions. Section I discusses problems in the field of educational research that have led observers to neglect the school-neighborhood relationship. Sociological, anthropological, and political studies of communities that provide evidence of the effects schools have on neighborhood politics, organization, and development are presented in Section II. Section III reviews studies that examine the community-supporting impacts of private and public schools; discusses the effect on the community when public schools are closed; and reports on the impact of school desegregation on communities. Section IV reviews the literature on the relationship between schools and neighborhood demographic change. Research objectives for examinations of the organizational and economic impacts of public and private schools are outlined in the final section. (Author/MK)