Replicating previous research on tracking done in the U.S., this study examines the determinants and effects of curriculum tracking (college bound or vocational) in urban and kibbutz schools in Israel. The purpose of the investigation was to examine the process of curriculum tracking in a classless society where assignment to tracks is based entirely on merit. The analysis shows that in the kibbutz, tracking is not associated with adverse effects on self-evaluation, access to motivated peers, or school orientation, but it has a considerable impact on academic achievement. In the urban Israeli schools curriculum placement not only affects achievement, it has a strong impact on self-evaluation and school orientation. The reason for this difference may be that urban students, unlike rural students, carry on almost all their interaction in school. Curriculum differentiation that coexists with structures that allow for more intertrack interaction may avoid some of the undesirable consequences of tracking. (Author/JM)