Race and class inequality have long governed patterns of residential and school segregation across America. However, as neighborhoods across the country gentrify, new questions arise as to whether or not these demographic shifts in neighborhoods correspond with school-level demographic changes. This study examines New York City's most rapidly gentrifying areas and its impact on racial diversity in public schools. Drawing on data from the Decennial Census, the American Community Survey, and the Common Core of Data, this study finds that schools in NYC's gentrifying areas have experienced a modest reduction in racial segregation, more so in traditional public schools than in charters. While this trend is promising, a high level of racial segregation remains. Research and policy implications are discussed.