The purpose of the study was to investigate how grading in primary school affected students' achievement measured by grades in 7th, 8th and 9th Grade and educational attainment in upper secondary school (12th Grade), and how the effect varied as a function of students' cognitive ability, gender and socio-economic status. The data derived from the Evaluation Through Follow-Up (ETF) longitudinal project containing information on students who received grades in Grade 6 and students who did not. The subjects were 8558 students born in 1967. A quasi-experimental design was applied where multiple growth and logistic models were fitted to data. The result showed a main significant negative effect of grading on subsequent achievement (Grade 7-9) and there were important differential effects: graded low-ability students received lower subsequent grades through Grades 7-9 and had lower odds to finish upper secondary education, compared to ungraded low-ability students. The gender difference seems to increase over time: graded girls achieve higher grades throughout Grades 7-9 and had higher odds to finish upper secondary education, compared to ungraded girls and graded and ungraded boys.