This study examined the effects of the normative school transition (n= 580) during early adolescence on the self‐system and perceived school and peer social contexts of poor, black (n= 161), white (n= 146), and Latino (n= 273) youth in the public school systems of 3 eastern urban cities. The results revealed negative effects of the school transition on the affective and behavioral domains of the self‐system. These declines in self‐esteem, class preparation, and grade‐point average (GPA) were common across race/ethnicity and gender. Concurrently, the school transition was perceived to be associated with changes in the school and peer contexts. Daily hassles with the school increased, while social support and extracurricular involvement decreased over the transition. Daily hassles with peers decreased, and peer values were perceived as more antisocial. These changes in the school and peer microsystems were also common across race/ethnicity and gender. In addition, transition‐associated school and peer changes and, in particular, changes in daily hassles with the school were associated with changes in the academic dimensions of the self‐system, that is, academic efficacy expectations, class preparation, and GPA. The results are discussed within a developmental mismatch framework.