Within the context of current discussions on improving urban public education, this report provides an analysis of the magnet school as a model for educational quality and excellence and gives an objective assessment of its potential as a method of improving urban education. A comparative case study methodology combined the collection of quantitative and qualitative data from 15 school districts. Major findings were that magnet schools (1) can and do provide high quality education in terms of instructional quality, curriculum, student-teacher interaction, student learning opportunities, and resource use; (2) provide high quality education without using highly selective methods of student admission; (3) need strong district leadership and innovative and resourceful school leadership; (4) have a significant positive impact on district-wide segregation under certain conditions, including strong policy commitment and effective implementation of a district-wide plan; (5) have slightly higher total costs per student than nonmagnet schools but increase the quality of education and racial integration; and (6) benefit from active community involvement in program planning, design, instruction, and support. The educational issues of the 1980's and the evolution of the magnet school in American education are summarized in this report. Following a presentation of the study's findings, the report outlines a set of 10 key steps in developing a successful magnet program. Finally, policy options applicable at the federal and/or state level and at the local level are discussed. (CMG)