The urban and educational literature has recently begun to focus on the increase of concentrated povertyin inner-city neighborhoods and the educational failure ofyouth often associated with livingin these neighborhoods. The currentstudy examines this issue by identifying which neighborhood characteristics influence educational achievementand what mechanisms mediate these associations. Using the National Educational Longitudinal Study of 1988 linked to 1990 census information at the neighborhood level, the currentstudyfinds not only that neighborhood characteristics predicteducational outcomes but also that the strength ofthe predictions often rivals that associated with more commonly citedfamily-and school-related factors. When considering how neighborhood characteristics influence educational outcomes, theorists have proposed several mediating processes, including collective socialization, social control, social capital, perception of opportunity, and institutionalcharacteristics. The currentstudy reveals that these mediators account for about40% of the neighborhood effecton educational achievement, with collective socialization having the strongest influence. Also discussed are the theoretical and policyimplications ofthis study and directions for future research.Increasing concentration of poverty in urban areas over the last thirty years has renewed interest in the effects of neighborhood-level conditions on the well-being of residents (Massey