Ability grouping is a common educational practice utilized by elementary teachers during reading instruction. This study examines whether ability grouping operates as a form of educational stratification by examining the following research question: To what extent do student literacy skills, background characteristics, and prior group placement predict ability group placement during reading instruction within first grade classrooms? This study analyzes data from two waves of the Early Childhood Longitudinal Study-Kindergarten Cohort (ECLS-K), a nationally representative longitudinal study of children, through the use of multinomial logistic regression to predict reading ability group placement. This study extends past research on ability group placement by utilizing prior group placement and classroom-level covariates to better understand which mechanisms predict group placement within classrooms.