Academic tracking has been shown to limit the quality of student instructional opportunities, decrease students' perceptions of their abilities, and negatively influence student achievement. These factors associated with academic tracking also may influence students in lower tracks to learn less and ultimately to drop out of high school. Few studies, however, have investigated academic tracking as a collective school-level phenomenon and an individual student-level predictor of school dropout. To date, no study has examined this issue using a nationally representative sample. In this study, multilevel analytic models of the first two waves of the Educational Longitudinal Study (ELS) of 2002 indicate that, while controlling for student- and school-level differences, students in the lower academic tracks are roughly 60% more likely to drop out of high school. Academic tracking appears to disadvantage students who are Latinos, have Individualized Education Plans (IEPs), or have lower socioeconomic backgrounds. Schools with a more positive academic climate, high morale, and a focus on learning, however, show a slight decrease in the likelihood of students dropping out. (Contains 1 figure and 4 tables.)