This report is the second in a four-part series of research reports covering teacher supply, demand, quality, and policy. It focuses on the diversity of the Texas teaching force in terms of race/ethnicity and gender, explaining that the Texas teaching force is far from matching the diversity of the student body. After discussing why ethnic diversity is important, the report focuses on student enrollment growth and examines curriculum policy and course enrollment trends. The report also examines teacher demographics, focusing on teaching assignments. Next, the report discusses diversity as it relates to students, teachers, and gender. It also looks at the pipeline of Texas teachers and discusses how to improve the status of minority students in education. Additional information is presented on trends in student and teacher ethnicity, indexes for measuring teacher diversity, and the correlation between diversity, socioeconomic status, and student performance. (Contains 24 references.) (SM)