Background/Context: School sanctioning policies that allow for external intervention into and closure of low-performing schools have become central components of the current educational accountability movement. Recent studies indicate that these policies compel principals and teachers to alter school and classroom practices in ways that target resources toward efforts to improve schoolwide test scores. Focus of Study: The present study extends this research by examining whether and how school sanctioning policies compel principals and teachers in urban high schools to address the failure that students experience in academic courses and on standardized tests. Research Design: Using qualitative case study methods, we followed principals and teachers in two urban high schools placed under district sanctions as they sought to make sense of and respond to both their schools' failure, as measured by standardized test scores, and high rates of academic course failure. The study employs a cultural sociological perspective to trace the explanations of school and course failure that the principals and teachers constructed as they interpreted the sanctioning policy, and to document the extent to which these interpretations became entrenched in school and classroom practices. Findings: Analyses of interview and observation data indicate that faculty in both schools enacted numerous changes in response to district sanctions. Whether these changes become institutionalized as part of school or classroom practice depended on the principals' and teachers' abilities to mobilize schemas, material resources, and legitimacy. The changes that sanctioning prompted, however, had little impact on faculty efforts to address course failure. Course failure remained bound to a moral causality that located its cause in students' moral deficiencies and that justified the attenuation of the schools' responsibility for it. Conclusions: The study's findings highlight the limits of school sanctioning policies to improve schooling for students in urban high schools and raise fundamental questions about to whom and for what such policies ultimately hold schools accountable.