This article investigates the relationship between student-teacher ethno-racial matching and students' placement in reading ability groups in kindergarten and first grades in the United States. Multilevel regression analysis of a nationally representative sample of students shows that Latino/a first graders are more likely to be placed in higher ability groups when assigned to Latino/a teachers. Furthermore, teachers' perception of students' learning behavior, a variable that has been linked to teacher-student racial congruence in the literature, has a strong positive effect on ability group placement in kindergarten and first grades. These findings have implications for minority teacher recruitment policies in school districts.