This paper investigates empirically whether immigrant students in Switzerland perform poorly compared to their native counterparts and provides some explanations. Using a national sample of the 2000 PISA (Programme for International Student Assessment) database, we first analyze the impact of immigrant status on pupils' achievement. We find a negative and significant impact of immigrant status on test scores in reading, mathematics and science literacy, even after controlling for a set of characteristics. We then decompose the observed reading score gap between Swiss and immigrant students to identify whether gaps in endowments explain test score differences along the distribution. Lower endowments explain most of the achievement gap in reading between Swiss and second-generation immigrants. However, lower returns explain around one quarter of the achievement gap between Swiss and first-generation immigrants for the weakest pupils. (Contains 6 figures and 10 tables.)