This paper describes the Action Research (AR) Team model for joining classroom observations with collegial interaction among university faculty, teaching assistants, and university students to improve pedagogy and the retention of diverse students in higher education. The paper includes a progress report of efforts to develop the model and apply it on a pilot basis at New Mexico State University. In the professional fields in which minorities and women are presently under-represented, science, engineering, and mathematics, the need for student retention efforts is seen to be especially important. The AR teams are described as part of efforts to retain minority students as they attempt to: (1) identify teaching strategies and aspects of the classroom environment and dynamics of classroom interaction that may impede student performance; (2) reduce differential treatment of students and improve the pattern of interactions; (3) increase use of non-stereotypical interactions, materials, and activities; and (4) provide more equitable support and motivation in the classroom for female and minority students. An appendix compares the workforce composition for women, African-Americans, and Hispanics in selected fields of employment and composition for those groups in United States population. (Contains 28 references.) (MAH)