The present paper explores issues of the educational marginality of migrant children in urban settings in two cities in China. The numbers of urban migrants exceed 100 million and are growing as China modernizes. This is creating tensions between residents and recent arrivals who lack residential registration and access to public services. As a result, migrant children often attend informal, private and usually unregulated schools of low quality organized by their communities. These tend to reinforce social stratification and reproduce marginality across the generations. The paper argues that state failure to provide basic education risks a growing divide between urban residents and recent migrants that has social consequences that must be addressed to remove discriminatory practices and resolve potential conflicts between hosts and migrant communities. (Contains 1 note and 5 tables.)