Background: Although we have learned a good deal from lottery-based and quasi-experimental studies of charter schools, much of what goes on inside of charter schools remains a "black box" to be unpacked. Grounding our work in neoclassical market theory and institutional theory, we examine differences in the social organization of schools and classrooms to enrich our understanding of school choice, school organizational and instructional conditions, and student learning. Purpose/Objective/Research Question/Focus of Study: Our study examines differences in students' mathematics achievement gains between charter and traditional public schools, focusing on the distribution and organization of students into ability groups. In short, we ask: (1) How does the distribution of ability grouping differ between charter and traditional public schools? And (2) What are the relationships between ability group placement and students' mathematics achievement gains in charter and traditional public schools? Research Design: With a matched sample of charter and traditional public schools in six states (Colorado, Delaware, Indiana, Michigan, Minnesota, and Ohio), we use regression analyses to estimate the relationship between student achievement gains and school sector. We analyze how ability grouping mediates this main effect, controlling for various student, classroom, and school characteristics. Findings: We find significant differences in the distribution of students across ability groups, with a more even distribution in charter compared to traditional public schools, which appear to have more selective placements for high groups. Consistent with prior research on tracking, we also find low-grouped students to be at a significant disadvantage when compared with high- and mixed-group peers in both sectors. Conclusions: Although we find some significant differences between ability group placement and student achievement gains in mathematics, these relationships do not differ as much by sector as market theory (with its emphasis on innovation and autonomy) would predict. Consistent with institutional theory, both sectors still group students by ability and have similar relationships between gains and grouping.