WASHINGTON -- The Supreme Court's ruling on whether the University of Michigan can give preferences to minority students in admissions, expected this week, could set the tone on race relations in schools and workplaces for years to come.

The ruling almost certainly will affect admissions practices, scholarships, and career-boosting internships and research fellowships at colleges around the country. But some legal experts expect the court to limit affirmative action, and the ripples from such a decision won't stop with education. Conservative judicial activists already are challenging corporate affirmative action and race-conscious federal hiring. And after several recent setbacks in the courts, state and local governments could be even more hard-pressed to defend programs that set aside a share of their contract work for minorities.

Military academies, among the staunchest backers of affirmative action, could find their ability to turn out black and Hispanic officers sharply reduced. As it is, 40% of enlisted personnel are minorities, while 91% of officers are white. The decision also could affect admission to selective public schools and possibly to magnet schools, such as science and technology or arts academies.

A decision that either affirms or disallows programs that have launched millions of minorities into middle-class lifestyles, but alienated some whites in the process, also could have reverberations in the voting booth. California Republicans have been in steady retreat since they successfully promoted two voter initiatives seen as anti-minority, including Proposition 209 that outlawed affirmative action in the state's universities and other public facilities.

At the very least, because the Supreme Court rules so infrequently on major social issues, the Michigan decision -- whatever it is -- could influence American attitudes broadly. "Americans have an attitude that what the Supreme Court says is what's moral, not just what's legal," says Gary Orfield, head of Harvard University's Civil Rights Project, which studies the progress of integration.

That's certain to set off an examination of what has been accomplished since 1961, when President John Kennedy first ordered his administration to take "affirmative steps" toward a "national policy of nondiscrimination." In Columbia, Md., Nat Alston, a 56-year-old human-resources consultant, says that affirmative action helped him get a job as a Maryland state trooper 30 years ago, and that he then helped recruit more African-Americans for the force. He worries now what a decision against the University of Michigan could mean. "I just think that, as a nation, we will go back," he said. "America then will become very comfortable with its prejudices."

The Supreme Court hasn't ruled on affirmative action in college admissions since the Bakke decision in 1978. Then, a sharply divided court decided that colleges could design admissions programs that take race into account if they could prove that diversity was a "compelling" state interest and the programs were "narrowly tailored."

Peter Kirsanow, a member of the U.S. Commission on Civil Rights, predicts three likely outcomes to the Michigan case. The court could decide that diversity isn't a compelling interest and outlaw Michigan's preferential-admissions programs for both undergraduate and law-school applicants. It could say that diversity is a compelling interest, but that Michigan's admissions programs aren't narrowly designed and so are unlawful. Finally, the court could rule that diversity is a compelling interest, but that only the law-school preference is narrow enough, and that the undergraduate program, which awards extra points to minorities, is too much like a quota. That latter sort of split decision, which would result in a curb on affirmative action, is considered by court watchers to be the most likely. Its effects would depend on what rationale the court uses to justify the law-school plan, and could leave things muddied enough to set off another round of lawsuits.

The two Michigan lawsuits were brought in 1996 and 1997 by white students who were denied admission to the undergraduate and law schools. More than 100 briefs were filed defending Michigan's admissions policies. But the Bush administration weighed in on the other side, defending the white students' demands for race-neutral admissions policies.

Many large companies that have spent years developing voluntary affirmative-action plans filed briefs supporting Michigan. Businesses worry that a decision could go beyond Michigan and "suggest that affirmative action should be rolled back for employers," says Valerie Hoffman, a Chicago lawyer who advises corporations on diversity.

If, for instance, the court rules that the university should have attempted to use race-neutral strategies before resorting to preferences, as the Bush administration contended in its Supreme Court arguments, companies may take that as a signal to rein in their minority recruiting. A decision that contains language challenging diversity as a compelling need, "casts doubt on diversity as a meaningful business principle," says Christopher Reynolds, a New York attorney specializing in employment law.

Affirmative-action programs and minority set-asides in government contracting once enjoyed broad legal latitude, including a 1979 Supreme Court ruling that said they could be used to correct "manifest imbalances" in job opportunities, as long as they were temporary and didn't "unnecessarily trammel" the rights of whites.

But since then, lower-court decisions have chipped away at these programs. In 1989, the Supreme Court ruled that state and local government couldn't steer business to minority contractors except to remedy specific instances of past discrimination. A decade later, fearing a definitive ruling against affirmative action, civil-rights groups helped pay to settle the case of a white New Jersey teacher who was laid off so that an equally qualified black teacher could keep her job. A federal appeals court had ruled in favor of the white teacher.

Legal advocacy groups opposed to affirmative action say they will be reading the Michigan case closely in search of any signal that leaves private employers more open to litigation. The Center for Equal Opportunity, a conservative Sterling, Va., advocacy group, says it already has written to several employers who advertised for minority job candidates, complaining that race-specific recruiting is inconsistent with the Civil Rights Act of 1964.

Likewise, the Center for Individual Rights, the Washington-based advocacy group that represents the Michigan plaintiffs, is pursuing a reverse-discrimination suit against the U.S. Department of Housing and Urban Development and the Equal Employment Opportunity Commission, the government entity charged with enforcing civil-rights laws in the workplace. Filed in a federal court in Washington last year on behalf of a white male HUD employee in St. Louis who had been turned down for several promotions, the suit contends that HUD uses preferential hiring goals for women and minorities indiscriminately and asks the court to prevent the EEOC from encouraging such programs.

Polls show Americans overwhelmingly opposed to giving minorities job, promotion or university-admissions preferences, but also overwhelmingly in favor of diversity. When a federal court ordered the University of Texas to end affirmative action seven years ago, "there was a lot of hostility," says Larry Faulkner, its president, who predicts that "the nation is going to face that on a huge scale" if the Supreme Court rules against Michigan.

Harvard's Mr. Orfield, like others who believe that equality for minorities in the U.S isn't yet secured, worries that the court "has the view that there isn't any urgent racial problem now." The landmark 1954 Supreme Court decision in Brown v. Board of Education helped launch the civil-rights movement by ruling segregation "illegitimate," he says. Ruling affirmative action unlawful a generation later could have "the reverse effect," he says.

But Ward Connerly, a Sacramento businessman instrumental in dismantling affirmative-action efforts in California, believes that it is important for the Supreme Court to rule in the other direction if the U.S. is to ever become a color-blind society "in which race is no more related to the transactions of government than religions or sexual orientation."

If the court's ruling precludes racial preferences, University of Texas law professor Douglas Laycock sees enormous pressure on state legislatures to find other ways to enroll minorities in the selective universities that can lead to good careers and big salaries. According to one study, black and Hispanic enrollment would drop to 4% from 12% at the 146 top-ranked colleges if they were forced to drop affirmative action and relied only on test scores and grades in admissions. "The political system will not stand for [the] kind of under-representation" that would result on campuses from a race-blind admissions process, he says.

Mr. Faulkner, the University of Texas president, says its professional and graduate schools "probably" would resume offering preferential admissions and scholarships to minorities if the court upholds the Michigan system. But many other schools are anticipating a decision that somehow limits their ability to treat minorities differently than whites.

Only a few hundred of the country's 4,182 colleges and universities get so many applications that they must choose among students; the others take almost everyone who applies. What's at stake at all schools are scholarships that are targeted or even limited to minorities. Grinnell College President Russell Osgood says the Iowa school's practice of asking black parents to contribute less toward their children's education than it asks of white parents is "gonna end." Mr. Osgood says his school has stopped taking gifts that would fund minority-only scholarships and is even phasing out its men-only or women-only scholarships because of a string of recent lower-court decisions limiting affirmative action.

Almost half of all public colleges and 43% of private ones use race in deciding on which candidates to give scholarships, says the National Association of Student Financial Aid Administrators. Public colleges use 5% of their scholarship money to target minorities exclusively, the group adds.

Conservative legal foundations already have targeted minority-only internships or fellowship programs used by many schools. If the plaintiffs win in the Michigan case, the legal foundations have said they next will go after so-called percent plans and outreach college-recruiting programs because they are seen as a way to get around legal restrictions on preferences. Percent plans, now in use in Texas, California and Florida, guarantee state-university admission to the top-performing students in every high school, rather than to the best applicants in the statewide pool.

The curbs against minority preferences have set off counterattacks on the preferences that most universities give to the sons and daughters of their graduates. State universities in California and Georgia already have dropped the preference, and U.S. senators on both sides of the aisle, ever alert to a populist issue, have called for abolishing legacy preferences.

Lower federal courts will also be looking to the Michigan ruling for guidance on racial equity in precollegiate education. Four years ago, a federal appeals court struck down preferences for minorities at a selective Boston high school, and a decision in the Michigan case could extend that ruling nationwide. Henry Wessman, the Boston father who brought the case after his daughter, Sarah, was turned down in favor of lower-scoring minority students, expresses regret about "things so far back in time" that harmed minorities. "But I don't know where you draw the line" on remedying it, says Mr. Wessman, whose daughter won a spot in the school through the court action and now is a college junior