This paper examines the impact of a state‐wide mandatory testing and placement program operating in Tennessee's community college system as it relates to retention and academic progress of minority students. Utilizing the Board of Regents' data base, the records of 5,139 first‐time 1986 freshmen enrollees at Tennessee's ten public community colleges were examined and tracked through three successive academic quarters. Analysis suggests that of this group, only 22% were actually enrolled in college level programs, as the balance (78%) were in the developmental studies program. The constriction of college placement for minorities is especially severe, since developmental program requirements must be satisfied before they can proceed to earn college level credits. Of the 5,139 first time freshmen, only 56 black students were enrolled in college level courses, and of these, only 26 remained enrolled in Regents' institutions after three quarters. Analysis of attrition by ACT cohort suggests that attrition is higher for those enrolled in developmental studies programs, and 13% higher for minorities than for white students. These findings suggest that public officials may wish to assess if the testing and placement program as it is currently operating is achieving stated goals of improved retention and graduation of minority students