Educational organizations that reflect a diversity of class, gender, socioeconomic status, and nationality in their membership establish a complex set of interactions that have implications for how groups are formed. The study on which this article is based examines the responses of principals to intergroup conflict that occurred as a result of cultural incongruities between teachers of color and European American participants in desegregated suburban schools. In schools, intergroup theory applies to school participants because of the nature of the organizational context between identity and organizational groups. The principal plays a critical role in creating an inclusive environment that determines how groups are formed, the emotional climate of the workplace, and how roles are structured. Because U.S. schools serve a more diverse student population with a greater need to recruit teachers of color than ever before, principals must be aware of the challenges in leading a varied group of followers.