Little attention has been paid to the role of peer social capital in the school context, especially as a predictor of adolescents' academic outcomes. This study uses a nationally representative (N = 13,738, female = 51%), longitudinal sample and multilevel models to examine how peer networks impact educational achievement and attainment. Results reveal that, in addition to those factors typically associated with academic outcomes (e.g., school composition), two individual-level peer network measures, SES and heterogeneity, had significant effects. Although educational attainment was generally worse in low SES schools, for all ethnic groups higher attainment was associated with attending schools with higher concentrations of minority students. At the individual level, however, membership in integrated peer networks was negatively related to high school graduation for Asians, Latinos, and non-Hispanic whites, and to GPA for Asians and Latinos, as only African-American achievement increased in more racially/ethnically heterogeneous peer networks. Our results suggest that co-ethnic and co-racial peer friendship networks should not be viewed as obstacles to the educational accomplishments of today's youth. In fact, in many cases the opposite was true, as results generally support the ethnic social capital hypothesis while providing little corroboration for oppositional culture theory. Results also suggest that co-racial and co-ethnic ties may mediate the negative effects of school choice, or more specifically of between-school socioeconomic segregation. Consequently, we conclude that school policies aimed at socioeconomic desegregation are likely to beneficially affect the academic outcomes of all race/ethnic groups.