This research gauged the impact of school size on student achievement by modelling the educational process and then examining the influence of size on that process. Using data for students and teachers from over 300 districts nationwide, the analysis identified factors that differ significantly between smaller and larger schools. There are fewer differences among student and community background characteristics than among factors over which policymakers have greater control--teacher and principal characteristics, school climate, and types of school personnel per student. The effect of these differences on student achievement is not large going from a small school to a moderately sized school, but very substantial going from moderate-size to large schools; in the latter case the difference is more than a quarter of the average gain in annual student achievement. This negative association between large schools and student achievement calls for additional investigation, especially since some large school characteristics are susceptible to policy or administrative manipulation. (Author/KS)