A school policy of grouping students by ability has little effect on average math achievement growth. Unlike earlier research, this paper also finds little or no differential effects of grouping for high-achieving, average, or low-achieving students. One explanation is that the allocation of students and resources into classes is remarkably similar between schools that claim to group and those that claim not to group. The examination of three school inputs: class size, teacher education, and teacher experience, indicates that both types of schools tailor resources to the class ability level in similar ways, for instance by putting low-achieving students into smaller classes. [JEL 121] (C) 1999 Elsevier Science Ltd. All rights reserved.