Ability grouping is sometimes thought to exacerbate inequality by increasing achievement gaps; however, ability grouping may in fact benefit a fast growing and often marginalized student population: children from non-English-speaking home environments. The level-appropriate, small-group instruction received in reading ability groups may be particularly beneficial to these language-minority children, who are not regularly exposed to English at home. Focusing on Hispanics, who make up the majority of language-minority students, the author examined this hypothesis through difference-in-differences estimation techniques in a hierarchical linear model framework. Ability grouping in reading during kindergarten was significantly associated with greater benefits for language-minority Hispanic students relative to other students. However, this benefit faded during the summer and first grade, unless grouping continued in first grade. These findings are robust to alternative specifications and suggest that differentiated instructional strategies upon school entry may be an effective, relatively low cost tool to combat the achievement gap faced by a fast growing segment of students. (Within-School Model Observations and Parameter Estimation is appended. Contains 10 tables, 3 figures and 27 notes.)