This study analyzes the turnover of principals in the Chicago (Illinois) Public Schools since the passage of the Chicago School Reform Act (CSRA) of 1989, and analyzes racial patterns in the recent retention of principals by Local School Councils (LSCs). The following key conclusions are reported: (1) a high percentage of principalships (about 30 percent) have turned over since the passage of the CSRA; (2) the turnover is expected to rise to between 40 and 50 percent by 1991; (3) all principals will be operating under 4-year performance contracts by 1991; (4) white principals were extremely likely to be retained regardless of the racial composition of the LSC; (5) no strong relationship could be established between an LSC's retention decision and the principal's race; (6) both the percentage of Hispanic principals systemwide and the retention rate for Hispanic principals were very low; and (7) the central school administration does not give LSCs or principals adequate assistance with the selection process. Recommendations for improving communications and the recruitment process are suggested. Statistical data are presented on 11 tables. The following materials are appended: (1) a list of eight references; (2) supplementary statistical data on six tables; (3) a discussion of the method used to test for statistical significance; and (4) a statement verifying the appropriateness of the research methodology and the accuracy of the findings. (FMW)