We examine the size and distribution of the gap in test scores across races within New York City public schools and the factors that explain these gaps. While gaps are partially explained by differences in student characteristics, such as poverty, differences in schools attended are also important. At the same time, substantial within-school gaps remain and are only partly explained by differences in academic preparation across students from different race groups. Controlling for differences in classrooms attended explains little of the remaining gap, suggesting little role for within-school inequities in resources. There is some evidence that school characteristics matter. Race gaps are negatively correlated with school size—implying small schools may be helpful. In addition, the trade-off between the size and experience of the teaching staff in urban schools may carry unintended consequences for within-school race gaps. © 2006 by the Association for Public Policy Analysis and Management.