Studies of structural effects in education have usually attributed normative or comparative reference-group meaning to school composition. The results of such studies show that variation among students in schools accounts for only modest amounts of aspiration and achievement. This study of elementary school classrooms and instructional groups departs from the familiar formulations and shows how school systems successively transform the composition of schools, grades, and classes as part of a process of allocating and using resources. It shows how the difficulty of classes, an indication of composition, constrains the composition of instructional groups, the instruction applied to them, and the learning of individuals.