PROPOSITIONS DESCRIBING THE RELATIONSHIPS BETWEEN DIVERSION AND LABELING THEORY WERE DEVELOPED. DIVERSION PROGRAM DIRECTORS (163 RESPONSES OUT OF 456 CONTACTS) WERE QUESTIONED ABOUT THEIR VIEWS CONCERNING THE PROPOSITIONS AND ABOUT THE ACTUAL OPERATION OF THEIR PROGRAMS. THE FINDINGS DO NOT SUPPORT THE VIEW THAT PRACTITIONERS TEND TO INTERPRET DIVERSION AS A WAY OF MINIMIZING JUVENILE OFFENDERS' PENETRATION INTO THE JUVENILE JUSTICE SYSTEM, RATHER THAN AS A MEANS OF DIVERTING YOUTHS FROM THE SYSTEM. RESPONDENTS INTERPRETED THE PROCESS IN BOTH WAYS. THE FINDINGS SUPPORT THE VIEW THAT DIVERSION PROGRAMS CENTERING AROUND LAW ENFORCEMENT AGENCIES PROVIDE PREVENTIVE DIVERSION, WHEREAS PROGRAMS CENTERING AROUND THE COURTS PROVIDE CORRECTIVE DIVERSION. THE ROLE OF COURT-RELATED PROGRAMS IS PRIMARILY REHABILITATIVE. THE CONCEPT OF PREVENTION APPEARS TO BE IMPORTANT IN THE INTERPRETATION OF THE DIVERSION PROCESS. PROGRAM DIRECTORS ACCEPT THE BASIC PROPOSITIONS ASSOCIATED WITH THE LABELING THEORY AS THEY RELATE TO THE IMPACT OF LEGAL PROCESSING ON JUVENILES. HOWEVER, THE DIRECTORS FEEL THAT THE CONSEQUENCES OF LABELING CAN BE REVERSED -- THAT THE INDIVIDUAL CAN BE TREATED AND THE DISCREDITED PERSON REHABILITATED. IT IS CONCLUDED THAT CONFUSION ABOUT DIVERSION STEMS FROM THE LACK OF A CONCEPTUAL FRAMEWORK, THE FAILURE OF ADVOCATES OF DIVERSION TO DELINEATE GOALS AND OBJECTIVES, AND PROBLEMS OF DEFINITION. CRIMINOLOGISTS AND PRACTITIONERS ARE URGED TO FOCUS ON THE CORRESPONDENCE BETWEEN CONCEPTUAL ARTICULATION OF PROGRAM COMPONENTS AND THE ACTUAL OPERATION OF THESE COMPONENTS. SUPPORTING DATA AND AN EXTENSIVE LIST OF REFERENCES ARE PROVIDED. (LKM)