This study examines how a school's capacity for institutional diversity relates to student achievement in socio-economically, ethnically, and linguistically diverse schools. It also investigates whether various student groups benefit differently from a school's level of student diversity and its institutional capacity for diversity. Using data from the High School Longitudinal Study of 2009 (HSLS:09), the study uses two-level hierarchical linear models to explore the relationships between multiple types of school diversity and student achievement and to examine the role played by an institution's capacity for diversity. Our findings confirm that different types of school diversity have different associations with the academic achievement of students from varied family and language backgrounds. We also find that a school's capacity for diversity is a significant predictor of the academic success of students, particularly for students from lower income families and those who use a home language other than English.