Purpose/Objectives: The school nutrition environment includes food policy and practices, advertising, and presence of competitive foods (CF). CF provide schools with revenue; however, CF decrease National School Lunch Program (NSLP) participation and reimbursement as well as the nutrient density of children's diets. Local wellness policies (LWPs) provide schools the opportunity to promote more healthful school nutrition environments. The purpose of this study was to examine NSLP participation and CF purchasing among students before and after LWP implementation and assess factors in the school environment influencing NSLP participation and CF purchasing. Methods: Twenty-four school buildings representing 16 school districts in one Midwestern state included eight high and eight middle schools from large districts and eight K-12 schools from small districts. Online surveys, interviews, and observational data were collected in fall 2007 and spring 2009. NSLP participation data was gathered from online databases and CF revenues were collected from schools using electronic forms. NSLP participation and CF revenues were calculated as meals/student/week and sales/student/year for the year prior to LWP implementation (2005-2006), year of LWP implementation (2006-2007) and one year post LWP implementation (2007-2008). Results: One-way ANOVA results found no significant change in NSLP participation or CF sales after LWPs were implemented. NSLP participation in large district high schools was significantly less (p less than or equal to 0.05) than middle schools, as well as small district schools (K-12). Factor analysis identified two factors, "physical environment" and "policy environment," that with free and reduced price lunches as a covariate were significant predictors of NSLP participation and CF purchasing. Results suggest the "physical environment" factor influences NSLP participation and CF purchasing more than the "policy environment" factor. Applications to Child Nutrition Professionals: Local wellness policies need to influence the school's physical environment (i.e., number of CF venues and items, lunchroom advertising) to significantly impact NSLP participation and CF purchasing. (Contains 4 tables.)