Although racial inequality is frequently studied in education, skin tone stratification has received less attention from educational researchers. Inequality by skin tone, also known as "colorism", contributes to larger patterns of racial inequality for African Americans and Latina/os. Discrimination by skin tone affects many dimensions of life, including education, employment, housing, spousal status, criminal justice sentencing, and even levels of depression and self-esteem. Although skin tone differences in educational attainment are clearly documented, the actual social practices in schools that create these differences are not well understood. This article theorizes the classroom-level interactions between students, teachers, parents, and administrators that contribute to color-based discrimination in schools. Drawing on theories of social interactions and social structures--including the "halo effect", the "beauty queue," "racial capital," and the "school-to-prison pipeline"--this article explores the many ways that color-based discrimination affects the educational trajectories of Latina/o and African American children.