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In the often wrenching world of foster care, the plight of American Indian children is especially fraught. Under the Indian Child Welfare Act of 1978, local agencies must try to place Indian children with Indian families whenever possible, and tribes may intervene in certain custody proceedings.

Congress passed the law after generations of Indian children were wrested from their homes and placed in non-Indian foster facilities and boarding schools. The law's supporters say it has worked in many instances — allowing Indian children to remain connected to their heritage, even when families fall apart.

But a chronic shortage of licensed Indian foster families in states like New Mexico, coupled with the poverty and substance abuse endemic to American Indian communities, has also made it challenging to apply.

In Bernalillo County, for instance, there are 65 Indian children in state custody but only 5 Indian foster homes, prompting Gov. Susana Martinez to publicly appeal for more families last March.

"Having enough families to meet the intent of the Indian Child Welfare Act is a big problem," said Jared Rounsville, the protective services director for New Mexico's Children, Youth and Families Department. "Which ends up resulting in Native children at times being placed with non-Native families. And then often times they are adopted by non-Native families."

Recently, the law's interpretation has been tested in a case that will be heard by the United States Supreme Court this year and is being watched closely by child welfare experts.

In that case, a family court judge ordered a white South Carolina couple to turn over a 27-month-old girl they had raised since birth to her Indian biological father.

The father, a member of the Cherokee tribe, was estranged from the mother and had relinquished rights to the child. He said he was unaware his daughter would be put up for adoption and sought custody when he found out, four months after she was born.

Lawyers for the couple said the child, known as Baby Veronica, forged a deep bond with her adoptive parents, who were present at her birth.

The South Carolina Supreme Court upheld the decision after the couple appealed. The court ruled that the birth mother made some efforts to conceal the father's Cherokee identity during the adoption and that federal law required Veronica to remain with her father, whom the court found had created a safe, loving home.

In a 3-to-2 ruling, the court said it had reached its decision "with a heavy heart," conceding that the adoptive couple, Matt and Melanie Capobianco, were ideal, loving parents.

Last year, supporters of the Capobiancos delivered a petition signed by more than 20,000 people to South Carolina lawmakers, urging them to revisit the law.

But its proponents say the case illustrates, with heartbreaking consequences, what happens when information about a child's tribal status is withheld.

"What is at stake is whether or not we not we go back to the days where deception and coercion are the norm in adoptions," said Terry L. Cross, the executive director of the National Indian Child Welfare Association.

According to the child welfare group, Indian children are still overrepresented in foster care at twice their rate in the general population — evidence, Mr. Cross said, that child welfare agencies are still too quick to pull Indian children from their homes.