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In recent years, a growing number of urban neighborhoods have experienced an influx of higher-SES households and increases in property values, a process commonly referred to as gentrification. Despite the growing prevalence of the “back-to-the-city” movement, very little research has documented what these changes mean for children’s academic achievement. This paper draws on a nationally-representative sample of children from the Panel Study of Income Dynamics and provides a formal mediation analysis that decomposes the total effect of gentrification on children’s achievement into that which operates through residential displacement and that which operates through alternative pathways. Results indicate (a) gentrification has a positive overall effect on children’s reading achievement, (b) gentrification increases residential displacement, and (c) residential displacement decreases reading achievement.