This report evaluates the success of the magnet school program in the Houston (Texas) Independent School District for the 1988-89 school year. The following sections are included: (1) "Overview of the District"; (2) "History of Desegregation in Houston"; (3) "Development of Houston's Magnet School Program"; (4) "Objectives Related to the Court Order"; and (5) "Information Required by the Settlement Agreement." Achievement of the following objectives is discussed: (1) reduction in the number of schools that are 90 percent or more White or combined Black and Hispanic; (2) reduction in the number of students attending schools that are 90 percent or more White or combined Black and Hispanic; (3) free transportation upon request to all students attending magnet schools outside their attendance zone; and (4) reports of student enrollment and teacher assignment by ethnic group. This report provides the following information for each magnet school as required by the Settlement Agreement: (1) race or ethnicity; (2) per pupil expenditure; (3) achievement scores; (4) average class size; (5) student/teacher ratio; (6) teacher experience; and (7) waiting lists. The following findings are presented: (1) the number of ethnically isolated schools increased; (2) the number of students attending ethnically isolated schools was reduced; (3) 16,587 students were transported over the 1-year period for the purpose of desegregation; and (4) a total of 98,163 students were affected by magnet school programs. Twenty-two tables are included. A list of the magnet schools is appended. (JS)