This paper discusses the use of student groups in formal education. A model is proposed which involves the development of student interdependence on common tasks, the use of group incentives which may be earned through competition with a standard or with other groups, and the exchange of student resources in teaching and learning. In contrast to the prevailing emphasis on similarity for grouping in schools and classrooms, it is argued that individual differences in age, skills, and socio-cultural experiences should be thought of as resources for exchange in student relationships. Such resources represent a potential basis for a division of labor and student teaching in the student collective. Some issues associated with student heterogeneity and relationships in comprehensive schools are explored. Student similarity and differences as a basis for groups are evaluated with emphasis on their consequences for intellectual growth, student solidarity, and conflict. In the final portion of the essay conditions which are supportive of an equitable student exchange are described. (RSM/Author)