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Why do adolescents growing up in disadvantaged neighborhoods perpetrate more violence? Social dynamics among neighborhood residents have long been proposed as key to mitigating this deleterious effect, but evidence supporting this expectation remains limited. We argue that dynamics in youths’ schools, especially teachers’ collective capacity to regulate youth behavior, are critical for understanding the link between neighborhood disadvantage and violence perpetration. We test these expectations with data from Waves 1-3 (1995-2001) of the Project on Human Development in Chicago Neighborhoods linked to exceptionally high-quality longitudinal data on Chicago Public Schools collected during a period of citywide school improvement efforts. School collective efficacy is derived from longitudinal surveys (collected in 1994, 1997, and 1999) capturing the capacity of teachers in a school to trust one another and take responsibility of students’ academic and social development. Additional school measures include student poverty and suspension rates and student racial composition. Results indicate that school poverty and racial composition partially mediate the association between neighborhood disadvantage and adolescent violence perpetration. Moreover, school collective efficacy is associated with significantly reduced violence and partially mediates the adverse association of school poverty. Implications for research on contextual effects, schools, neighborhoods, and informal social control will be discussed.