Successful principals of urban schools are able to understand the interactions between the city school and its environment and are able to take advantage of the array of urban resources, buffer the school and its students from some negative environmental influences, and provide services that help offset negative factors. Against a backdrop of ambivalence, the urban principal must recognize the size, population density, diversity, and technological development that characterize the urban environment. The task of the urban principal is to recognize the factors of the urban context that have impacts on student outcomes. A framework is presented that accounts for the influences of home and family, school, and the community on the urban student. The interactivist principal is able to anticipate trends and to understand and shape the future by regulating interchanges between the school and its context. Students must be at the center of the principal's consideration as he or she attempts to use urban resources to the maximum while insulating the school and students from negative factors. (Contains 1 figure and 136 references.) (SLD)