This study examines the role of racial/ethnic segregation and peer effects in shaping educational achievement and attainment, using multi-level modeling on a nationally representative sample of adolescents. As in many prior studies, school socioeconomic composition was a significant predictor of achievement and attainment for students of all racial/ethnic groups. Educational attainment was negatively affected by the concentration of low-income students. However, for some racial/ethnic groups educational attainment increased with higher concentrations of minority students. Furthermore, peer social capital, measured as the average achievement of a peer network, was a significant predictor of both educational achievement and attainment for all racial/ethnic groups. In addition, and counter to some earlier studies, results revealed that segregated peer networks among African-Americans may lead to better academic achievement and attainment than school settings with more integrated friendship networks. (C) 2011 The Foundation for Professionals in Services for Adolescents. Published by Elsevier Ltd. All rights reserved.