This paper addresses problems in research on urban education and outlines several National Institute of Education (NIE) proposals for dealing with these problems. It is argued that research should not stray too far from the basic educational goals of inculcating literacy, that educational research must become more diverse and sophisticated in its methodologies, and that the topics for study should be realistic. Other problem areas discussed include the "teacher drop-out" syndrome, the diversity of present day classrooms, special education needs, and external demands such as accountability movements and legislative requirements. Four projects which relate to urban settings and reflect the philosophy of action-oriented research are described. These include Jesse Jackson's Project EXCEL, the Cities in School Project, the Career Intern Program, and the role of community colleges in improving adult literacy. (Author/EB)