Prior research has contributed to our understanding about the ways teachers communicate their expectations to students, how students perceive differential teacher behaviors, and their effect on students' own perceptions of ability and achievement. Despite more than half a century of this work, historically marginalized students continue to be underrepresented in a vast array of achievement outcomes. Scholars have argued that asset-based pedagogy is essential to effective teaching, but reviews of research repeatedly point to a need for empirical evidence. This article describes a study wherein asset-based practices are applied to a classroom dynamics framework to examine how teachers' asset-based pedagogy beliefs and behaviors are associated with Latino students' ethnic and reading achievement identity. Analyses revealed that teachers' critical awareness moderates their expectancy, resulting in higher achievement; and teachers' critical awareness and expectancy beliefs were found to be directly associated with teachers' behaviors, which were in turn related to students' ethnic and achievement identities. Implications for teacher education are discussed.