This article responds to recent calls for greater clarity and transparency regarding methods in qualitative research. On the basis of a 3-year ethnographic study of the overrepresentation of minorities in special education, the authors address key tenets of grounded theory and attempt to reconcile some of the methodological challenges inherent in naturalistic inquiry. They discuss theoretical considerations and use a visual model to illustrate how they applied grounded theory to this complex and sensitive topic. Emphasizing the social nature of decision making in special education, the authors point to the appropriateness of qualitative methods to the investigation of such issues.