In this ethnographic study, we look closely at everyday classroom interactions in order to examine the complex process of creating equitable classroom communities in racially and socioeconomically diverse schools. We use the lens of relational difference (Abu El-Haj, 2006) to examine how students negotiate social boundaries within their new school; how students and teachers use small group work to co-construct expectations of academic ability; and how teachers communicate and students navigate the social significance of differentiated instruction and assessment. We find that assumptions that some students are more competent than others permeate the classroom, and these perceptions of ability are frequently tied to students' race and socioeconomic status. We provide suggestions for teachers and teacher educators who wish to challenge these unspoken classroom norms.