Michael Chun, headmaster of the school, said the Hawaiians-only policy follows the 1883 will of a princess who was concerned that Hawaiians would suffer disadvantages. Ten years after her death, the Hawaiian monarchy was overthrown by a group of US businessmen and sugar planters.
''Their culture was shredded, their spirit was broken, and their sense of sovereignty and independence was taken away," Chun said. ''She saw [that] one of the ways to help her people survive was through education."
Since the appeals court's ruling, alumni and other Native Hawaiians have risen to the school's defense. On Aug. 20, about 400 marched in San Francisco to petition the full appeals court to review the case. On Aug. 6, more than 15,000 demonstrated across the islands to protest what they see as an assault on their culture.
Since its humble start with a couple of dozen boys, Kamehameha has expanded to campuses on other islands, becoming the largest and richest independent private elementary and secondary school in the nation.
About 5,100 Hawaiian and part-Hawaiian students from kindergarten through 12th grade attend classes on the schools' three campuses.
Funded by a $6.2 billion trust, it is also Hawaii's largest private landowner, with 365,000 acres, including resort, commercial, and residential holdings.
Jim Slagel, who has taught advanced placement English at Kamehameha for 16 years, said his students are no different from those he taught at public schools in the mainland.
''It's not a typical private school," Slagel said. ''We are still dealing with the lower social and economic students."
The school's substantial assets allow it to subsidize tuition costs for 60 percent of its students, making admissions highly prized and extremely competitive. Only one in eight applicants is admitted.
Kamehameha's $2,686 annual tuition falls well below other Hawaii private schools.
In addition to providing a birth certificate to prove Hawaiian ancestry, applicants for grade 7 and higher at Kamehameha must pass an admissions test, undergo interviews with professors, and write an essay.
The school's stated policy is that non-Hawaiians may be admitted if there are openings after Hawaiians who meet the criteria have been offered admission.
But the school in recent years has enrolled only two non-Hawaiians.
Chun said opening the school to all students would deny many underprivileged Native Hawaiian children a better future.
Native Hawaiian families are more than twice as likely to live in poverty than the state's general population, according to the school's 2005 Native Hawaiian Educational Assessment report.