This report describes school operation changes in scheduling, curriculum, decisionmaking powers, and individualization of instruction that are concurrent with the adoption of differentiated staffing. The author defines differentiated staffing, explains where and at what levels it has been utilized, provides descriptions of results achieved, gives some idea of the cost of implementing differentiated staffing, and provides a rationale for and lists the steps crucial to its implementation. The appendixes contain a directory of school and State departments of education that encourage differentiated staffing, a list of Federally funded projects, some comparative cost analysis figures between this approach and traditional schools, and a bibliography. (Author/MLF)