Overwhelmingly, the cultures of schools reflect the norms of middle-class European-Americans. Many young Native Americans fail to adapt to this culture and are perceived as unacceptable and uneducable. Deprivation of a sound educational system and concomitant social relegation lead to dismal educational outcomes and subsequent effects on health, life expectancy, employment, and income. This monograph examines the still prevalent stereotypes and prejudices operating in mainstream society and schools, and explores research findings and resources that can help chart new directions in Native education. Chapter I discusses the history of assimilation policies, historical misinformation about Native American cultures, the dilemma of non-Native teachers teaching Native students, school failure as a form of resistance, and 10 types of bias found in instructional materials. Chapter II describes the diversity of Native cultures, both among groups and over time, and suggests ways that educators can put Native cultural capital to use. Chapter III discusses the importance of training more Native teachers and the value of tribal colleges in this effort. Chapter IV describes ways that all teachers can become more responsive to Native students, parents, and communities; examples of promising practices; and criteria for constructing a theory of Native education. An annotated bibliography includes 48 related items available through the ERIC system. Contains 72 references. (SV)