The report provides an update on racial and ethnic distribution in student enrollment and faculty employment for 1995-96 within the Oregon state system of higher education. A Faculty Diversity Initiative is highlighted, focusing on campus efforts to implement plans to achieve greater faculty diversity with the use of supplemental funds. Of the total student enrollment, minority groups represented 11.5 percent in 1995, compared to 12.0 percent in 1994. Hispanic enrollment has increased most since 1981; Asian Americans graduate study enrollment declined slightly, while the number of Asian American undergraduates increased by 15 percent. European American enrollments declined 15 percent, although non-resident enrollment increased in this group. First-time resident freshman enrollment shows a 104 percent increase in minority groups. Hispanic non-resident first-time enrollment grew by 242 percent. It is recommended that policy be reviewed in light of these changes, that procedures for assessing impact of recruitment and retention be established, including an external review process. Among faculty, currently 7.6 percent are minorities, most Asian American (4.2 percent) and Hispanic (2.2 percent). African Americans and American Indians continue to be underrepresented. Highest minority group representation is among assistant professors (13.6 percent). Most of the increases in minority faculty are attributed to the Faculty Diversity Initiative. Attachments include tables that show student enrollment data, full-time instructional faculty data, and faculty diversity initiatives. (MSE)