This study analyzes the impact of school structure on the friendship networks of students in desegregated schools in Israel. It highlights the importance of school features, such as the homeclass, to the formation of relationships among seventh through ninth grade students. A review of research literature on this topic is presented in the areas of friendships, desegregated schools, and contact theory/categorization processes. School policies for assigning students to classrooms is the structural feature in question. The findings show that students grouped in homogeneous homeclasses with low academic status name out-of-homeclass students as their friends while students in homogeneous homeclasses of high academic status name in-class students as their friends. Students in heterogeneous homeclasses have a more balanced structure of insider/outsider friendships. The balance may be due to the increased contact of these latter students with classmates who are more diverse than those in homogeneous classrooms. These results indicate that educators, administrators, and policy makers must become more aware of the social aspects of schooling so that the educational environment can help to foster better social development. Six tables and a 49-item bibliography are included. (VM)