This paper addresses issues in the relationship of instructional grouping to both educational excellence and equity. First, equity issues are considered in light of two court cases: Hobson v. Hansen and Marshall v. Georgia which, together, offer guidelines for equitable ability grouping. Next, the research on the effects of grouping arrangements on learning is summarized in a table comparing four categories of grouping arrangements for dimensions, placement criteria, flexibility, instructional practices, and determination of expectations. A review on achievement grouping and tracking concludes that grouping arrangements alone are not the primary variable for school effectiveness. The importance of using effective practices for all levels, particularly the low achievement levels, is stressed. A section reviewing the research on mixed-age grouping suggests the effectiveness of achievement grouping (not mixed-age mixed-ability grouping) for instruction in reading and/or mathematics. Discussion of excellence issues focuses on use of mixed-ability grouping to achieve world class achievement. Issues addressed include similarities and differences in high quality instruction for high- and low-achieving students, use of nonstandardized expectations in high academic achievement, and mixed-ability grouping and self-esteem. A final section reviews research showing the effectiveness of "considerate" instruction versus traditional "inconsiderate" instruction for both low and high achievers. (Contains 58 references.) (DB)