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This study examines the degree to which classroom context contributes to ethnic and socioeconomic achievement gaps in first grade. Using data from the Early Childhood Longitudinal Study Kindergarten cohort of 1998 and a series of multilevel models, the study estimates the achievement gaps at the end of first grade and the degree to which classroom context has contributed to them. The results show sizeable ethnic minority achievement gaps at the end of first grade and that approximately 13-21% the gaps are due to classroom effects. Contextual characteristics of the classrooms account for a large percentage of the gaps. In fact, after controlling of for contextual factors, the Hispanic-white gap is small and non-significant. These findings have important policy implications.