Charter Schools emerged in the 1990s as an alternative to the U.S. public schools with the hope that charter schools would not be exposed to the same problems of the traditional public schools that are due to high levels of bureaucracy, less autonomy and no competition for students, hence for financial resources. This came about following the success of "magnet schools" that emerged as a product of the previous generation in the 1970s. Likewise, charter school movement had bipartisan support from many levels and today, although still only about 1 percent of students is enrolled in charter schools they emerged as a successful model to traditional public schools and even to the private schools in many areas. U.S. has the most diverse group of students in its history and all the basic trends indicate the diversity will become even greater. Among the school age population after only one generation the entire country will become a minority non-white or non-European in origin. Diversity is growing rapidly in the nation's suburban rings, which have become the center of American life and politics. Yet schools remain largely segregated and are becoming more so although Americans still believe that their children benefit from integrated education and there is substantial evidence that those beliefs are correct. Segregated schools are still highly unequal. Segregation by race related to segregation by poverty and to many forms of educational inequality for African American and Latino students; few whites experience impoverished schools. Efforts to overcome the effects of segregation through special programs have had some success, but there is no evidence that they have equalized systems of segregated schools. Segregated schools particularly those in big cities have stunningly high levels of high school dropouts and very poor records of preparing students for higher education. Segregation has not been a successful educational or social policy. Yet U.S. school system is experiencing a continuing expansion of segregation for both blacks and Latinos and serious backward movement in the South. Specifically in this study, effect of charter school movement on the issue of ethnic, racial, religious, socio-economic segregation has been analyzed and it has been concluded that in fact there is a relation between the segregation issue and the charter school movement and that this relationship is mostly a negative one unlike magnet schools, which substantially improved the segregation problem in the 1970s; however it was not clear whether it is the charter school movement that is the cause or it is the other way around.