Although previous research has indicated that youths who live in economically depressed neighborhoods tend to have higher school drop-out rates, lower grades, and reduced cognitive abilities, few of these studies have explored the mechanisms through which community socioeconomic status (SES) influences youth educational attainment. The authors examined longitudinal data from 1,128 respondents who took part in the National Survey of Children study conducted in 1976, 1981, and 1987. The authors explored the deleterious effects of several variables on school outcomes, such as peer group behavior, delinquent behavior, attachment to parents and school, and neighborhood mobility. Results of multivariate statistical analyses revealed that approximately one third of the positive effect of depressed neighborhood SES on school dropout rate could be attributed to the educational behavior of peers, which is consistent with epidemic models of neighborhood effects. Variables that demonstrated a smaller influence on the relationship between depressed neighborhood SES and school dropout rate included youth’s lower educational aspirations and higher rates of mobility in poor neighborhoods. Adolescent’s delinquent behavior, attachment to school and parents, and parental control had little influence, despite their centrality to theories of neighborhood effects. More research is needed before a comprehensive theory is attempted to explain the deleterious effect of depressed neighborhood SES on educational attainment. Tables, references