Racial disproportionality in school discipline is an enduring systemic problem whose patterns change from one context to another. In order to develop systemic solutions that are responsive to local contexts, school stakeholders' collective, agentic actions toward systemic changes are essential. Utilizing a participatory systemic design process led by an urban high school community, this case study examines how "Learning Lab," an inclusive problem-solving process, fostered urban school stakeholders' transformative agency. Through structured decision-making and collaborative design activity, Learning Lab participants analyzed systemic contradictions in the school discipline system and developed a culturally responsive behavioral support system to address racial disproportionality in discipline outcomes.