In July 1995, the University of California's Board of Regents voted to ban consideration of race and ethnicity in admissions and employment--a ban that was extended to all state agencies when the voters of California approved Proposition 209 in November 1996. This paper discusses the national controversy over affirmative action and analyzes the experience of the University of California as a case study in how an elite public university responded to the end of nearly three decades of affirmative action. It concludes that profound social and demographic change in American society since the 1960s, especially the growth of income inequality, requires a rethinking of affirmative action, and of how the goal of diversity can be achieved in elite public universities. (Contains 23 notes.)