Abstract: | Abstract By incorporating two theoretical frameworks this study examines how school characteristics shape first-grade reading ability-grouping practices, and how this, in turn, affects students’ reading achievement. The author uses the data from the Early Childhood Longitudinal Study and applies the propensity-score method to examine whether first-grade ability grouping improves student achievement, whether ability grouping increases achievement inequalities, and whether its effects vary by student initial abilities and/or school contexts. Findings support an argument that ability grouping is an organizational response to problems of diversity in the student body. Schools that use ability grouping are likely to have heterogeneous ability compositions. They are also public, low-performing, low socioeconomic status, and high-minority schools. In these schools, ability grouping has no effects or negative effects, particularly for low-ability students. In contrast, ability grouping may improve achievement for all students in schools with advantageous characteristics, mostly private schools, and may reduce achievement inequalities, because low-ability students benefit the most from this practice. |