The National School Lunch Program is not meeting its nutritional goals. Data for 330 Minnesota school districts are analyzed to derive recommendations for improving the nutritional quality of school lunches. This study finds, contrary to widely held views, that lunch sales do not decline when healthier meals with less fat, for example, are served and that more nutritious lunches do not necessarily cost more. Healthier meals have higher labor costs, but lower costs for processed foods. Indirect costs, paid by the food service to the school district, negatively affect meal quality by decreasing funds to upgrade kitchens and train staff to prepare more nutritious meals.