Background: Ability grouping has resurged in U.S. schools despite long-standing debates over its consequences for educational equity. Proponents argue that it is the best response to variation in academic skills because it allows teachers to customize the content and pace of instruction to students' diverse needs. Critics answer that this practice places students in divergent educational paths that reproduce educational and social inequalities. Despite the contested nature of ability grouping, research has yet to produce reliable longitudinal evidence to evaluate critics' claims. Objective: We examine the degree to which exposure to within-class grouping for reading instruction from kindergarten to third grade is predictive of students' reading test scores and English coursework in the middle grades. Research Design: We use multilevel achievement growth models predicting average reading achievement from kindergarten to eighth grade as a function of years of exposure in low, average, or high ability groups in kindergarten through third grade and control variables relevant to each grade. We evaluate the achievement differences between students who are grouped in these ability groups for one or more years and those who were never ability grouped. We use multinomial logistic regression models to estimate the degree to which number of years in each ability group in K-3 grades predicts placements in eighth-grade English classes (below grade or honors, as opposed to regular English classes). Data: We use data from the Early Childhood Longitudinal Study-Kindergarten Cohort (ECLS-K), a national panel study of the 1998 U.S. kindergarten cohort sponsored by National Center for Education Statistics, U.S. Department of Education. Our sample consists of 7,800 students with data for fall of kindergarten, and spring of kindergarten and first, third, fifth, and eighth grades. Findings: Compared with similar students who were ungrouped in the early grades, those in high-ability reading groups have higher test scores, whereas those in low-ability groups have lower test scores in every grade from kindergarten to the eighth grade. In addition, compared with their ungrouped counterparts, students in low-ability groups in the early grades are more likely to enroll in eighth grade English classes that are below grade level, whereas those in high-ability groups in these grades are more likely to enroll in honors eighth-grade English classes. Achievement gaps between previously grouped and ungrouped students increase with every additional year of exposure to ability grouping. Conclusions: Students' ability group placements in the early grades evolve into divergent educational paths that grow further apart with multiple years of grouping. These findings provide the first longitudinal evidence linking ability grouping to the reproduction of educational inequalities.