The advantages and disadvantages of ability grouping for student achievement are strongly contested, with studies presenting different results. However, much of this research has focused on class-level or subject-level ability grouping. Relatively less research has focused on school-level ability grouping. More importantly, the role of teacher support has often been neglected in the ability grouping literature. The aim of this study was to shed light on the under-investigated area of school-level ability grouping, with teacher support examined as a crucial theoretical mechanism. We examined whether teacher support plays a mediating and/or moderating role in terms of how school-level ability grouping is related to student achievement in English and mathematics. The participants were 554 Hong Kong secondary students from the high- (Band 1), medium- (Band 2), and low- (Band 3) ability groups. The results indicate that students from high-ability groups enjoyed greater levels of teacher support, which partly explains their higher levels of achievement. This finding supports a mediation mechanism. Moreover, the results also provide support for a moderation mechanism. When students in low-ability groups received high levels of teacher support, they were able to achieve as much as students in the high-ability groups, in English but not for math.