This chapter examines the extent to which the composition of classes affects learning outcomes. The aim is to explore peer effects when students are organized into classes on the basis of ability, ethnicity, or gender, as well as the effects of multigrade and multi-age classes and class size. The argument is defended that these composition factors affect only the probability that differential instruction and learning occur and that, at best, their influences are indirect. Teachers appear not to change their teaching activities when class composition is changed and most often the power of peer effects is rarely realized. Any direct effects of class composition are less related to learning outcomes and more related to equity and expectation effects by teachers and other participants (students, parents, and principals). Whether a school tracks by ability or not, reduces class sizes, implements multigrade/multi-age or single-level classes, or has coeducational or single-sex classes, appears less consequential than whether it attends to the nature and quality of instruction in the classroom, whatever the between-class variability in achievement. The learning environments within the classroom, and the mechanisms and processes of learning that they foster, are by far the more powerful. Good teaching can occur independently of the class configuration or homogeneity of the students within the class.