The Education Sector in Kenya and other parts of the world has faced many challenges particularly dropouts, which is an indicator of low internal efficiency during the past two decades. This study sought to determine and analyze the dropout levels of Public Secondary Schools in Kericho District of Kenya for the period between 2004 and 2007. The internal efficiency indicator that was examined in relation to school characteristics was dropout rates. Data was collected from Heads of schools and Guidance and Counseling Teachers in all the 64 public secondary schools in the district that were already doing KCSE examinations by 2004. The study employed Cross Sectional Research Design as a framework for data collection. Primary data on dropout levels was obtained from the respondents using structured questionnaire. Means, Percentages, Frequencies, Standard Deviations and T-tests were used to establish internal efficiency levels. Tests of significance were set at 5% significance level. Statistical analysis was done using Statistical Package for Social Sciences (SPSS). The study revealed that dropout levels were higher in Day compared to Boarding schools, Mixed compared to Single Sex schools and Single Stream compared to more than one stream schools. The study also found that dropout rates increased with increasing levels of education. The findings of the study are expected to benefit the school managers especially the Board of Governors (BOG), the Parents Teachers Association (PTA) and Schools Principals, as well as the Ministry of Education in making decisions about school size, school regime and school type, with respect to internal efficiency indicators specifically dropout rates.