(FORTUNE Magazine) – For a long time Tom Smith, a Cherokee, considered Native Americans to be "lost in the shadows" of corporate America--widely overlooked by recruiters and purchasing managers. His own people didn't help the cause either by being "a silent minority" while other ethnic groups lobbied for greater portions of the corporate pie. But Smith, president of a five-year-old advocacy group, the Native American Business Alliance, and CEO of a $15 million plastic-molding firm in Englewood, Ohio, says American Indians are slowly rising to join the chorus calling for major companies to recognize and embrace the talents among all minorities. "We have become more vocal in telling corporations that it's time to bring us into the mainstream," he says.

Some companies appear to be listening: Native American representation in the total work force of the companies in our survey rose from 0.67% last year to 0.72% this year, though it must be added that the companies in that pool have excellent diversity records. The 1999 figure corresponds with the proportion of Native Americans in the U.S. at large, indicating that these companies, at least, are headed in the right direction.

Yet Smith and his colleagues aren't exactly cheering. After all, Native Americans are historically and legally isolated from the rest of America by tribal sovereignty laws. The unique laws governing Indian reservations have enabled some tribes to establish lucrative gambling operations, though only 8% of Native Americans, in fact, gain from casino revenues. Little wonder progress has come slowly for the only people indigenous to this nation. "Most students in Indian country consider working for the FORTUNE 500 a very remote idea," says Dean Chavers, director of the Native American Scholarship Fund, an Albuquerque-based organization that urges Indian students to pursue business careers. Alas, only one of the fund's 198 former students works for a FORTUNE 500 firm--most have returned to their reservations.

To ease the transition, some companies are taking real steps to assure Native Americans that they don't have to leave their culture at the door. At Lucent, around 250 American Indian employees are members of Luna, an affinity group that holds monthly conference calls connecting employees from across the country; hosts an annual meeting on an Indian reservation; provides updates on job openings; and helps address career concerns. Luna members regularly advise Lucent recruiters on seeking applicants in Native American strongholds like New Mexico. And the company has forged a strong bond with the American Indian Scientific and Engineering Society in Albuquerque. "You never know, you may miss hiring a talented person if you don't recruit from as many sources as possible," says Ralph Bazhaw, Luna's president.

--Edward Robinson