The primary focus of this report is to examine the effect that geographical location may have on the performance of students from schools from all parts of Australia who participated in the Organisation for Economic Co-operation and Development (OECD)/Programme for International Student Assessment (PISA 2000). Approximately 5,477 students from 231 schools across Australia encompassing schools in Major Cities, Inner Regional areas, Outer Regional areas, Remote areas and Very Remote areas participated. It was found in PISA that students in remote areas are not achieving at the same level as their city counterparts. In PISA, levels of proficiency were described, Level 1 being the most basic and Level 5 the most complex. It was found that 27 percent of students from remote areas were achieving at the two lowest levels, compared to 12 percent of students from major cities. At the other end of the scale, 18 percent of remote students achieved at the two highest levels, compared to 46 percent of the city students. The most important factor positively associated with success in reading literacy has been found to be students' engagement with reading. (Contains 41 tables, 2 figures, and 1 footnote.) [This publication is the result of research funded by Australian State, Territory, and Commonwealth governments.]