Would a child who doesn't look like an Indian - but whose mother is an Indian - be harmed by growing up on an Indian reservation?

Yes, said two Texas courts. But Indian groups supporting the mother who was denied custody of her daughter say no, arguing that the Texas courts' findings are an infringement of constitutional guarantees of equal protection under the laws and due process.

The case involves Tiffany Butts, 9, daughter of Bernadine R. Brokenleg, a full-blooded Sioux, and Bernard C. Butts Jr., who is white. The court held that on a reservation Tiffany would be "reared under unnatural conditions" that would endanger her "physical and emotional well-being."

But the 8,000 member Rosebud Sioux Nation says it is "plainly inaccurate to say that because an Indian has blue eyes or light hair or complexion that he cannot become accepted as an Indian person on the Rosebud Indian Reservation or that it would be unnatural for the person to be raised thereon."

The case has been appealed to the Supreme Court, which must decide whether to review the lower court ruling.

Tiffany was 18 months old when her parents' marriage was annulled in California. Mother and daughter remained there several months. In May 1972 they moved to the Rosebud reservation in South Dakota.

Fourteen months later, Butts and his parents visited them and, with Bernadine's consent, took Tiffany on a vacation. But after the vacation, the grandparents kept the child with them in their home in Kermit, Tex.

Bernadine visited Tiffany at the Kermit home three times between December 1973 and August 1976, phoned her several times a year, and wrote to her occasionally.

Bernadine has earned a small income as a secretary, teacher's aide and tutor, although she was unemployed for several months. Meanwhile, Tiffany's grandparents earned more than $2,000 a month.

In 1975, the grandparents petitioned for custody of Tiffany, alleging that Bernadine had abandoned and neglected her in violation of Texas law.

In the trial, Bernadine said that she had adequate housing for Tiffany on the reservation. But the grandparents testified that "the house was dirty and without adequate bathroom facilities." When Tiffany was bathed, they said, "the dogs were in and out of the water." They also said that when they picked her up in July 1973 "she had a cold, tonsillitis, and ticks in her hair."

In Kermit, the evidence showed, Tiffany has her own bedroom, is well-fed and clothes and is apparently a happy, well-adjusted child.She told the judge in his chambers that she wanted to stay with her grandparents.

In Bernadine's behalf, a psychiatrist testified that she was a competent mother and that Tiffany's best interest would be served by being with her mother on the reservation. Two officers of the tribe, also testifying for Bernadine, said that her reputation was good and that Tiffany, a normal child when she lived on the reservation, would be well accepted if she returned.

In December 1976 the trial judge ruled for the grandparents. Bernadine appealed on several grounds. One was that her fitness as a mother was not in question. Another was the trial judge's findings that it would be "detrimental" to Tiffany to grow up on the reservation.

The Court of Civic Appeals in El Paso, also finding no evidence that Bernadine is an unfit mother, nonetheless upheld the award of custody to the grandparents as being in Tiffany's best interest.

In a pending petition to the Supreme Court for review of the decision, the Association on Indian Affairs, Inc., representing Bernadine, attacks that conclusion.

The group charges that the finding, not only are not based on evidence produced at the trial, but also are "substantial infringements" of the guarantees of equal protection of the laws and of due process.

The findings operate "automatically and arbitrarily," the association contends. They make conclusive presumptions, on the one hand, that it would be bad for a child to be raised on a reservation, and, on the other hand, "that physical and emotional benefit will automatically inure to a child raised in a community where the primary population group racially resembles the child."

The association argues further that the findings invidiously discriminate against parents who may wish to raise children with non-Indian physical features on a reservation, and are based "on racial considerations totally irrelevant to any legitimate purpose of the state to protect children from parental abuse or neglect."

The possibility of a recurrence of a case such as Tiffany's was reduced on Oct. 14, when Congress enacted the Indian Child Welfare Act. The law says that state courts either will not have jurisdiction in parental-rights cases involving Indian children such as Tiffany, or could appoint a conservator with "clear and convincing evidence . . . that the continued custody of the child by the parent . . . is likely to result in serious emotional or physical damage to the child."