Studies have documented a strong relationship between low birth-weight status and adverse child outcomes such as poor school performance and need for special education services. Following a cohort of more than 1,300 low-income and predominately African American children in the Chicago Longitudinal Study, the authors investigate whether birth weight and family socioeconomic risk measured at the time of the child's birth predicts placement into special education classes or grade retention in elementary school. Contrary to previous research, the authors find that low birth weight (less than 5.5 pounds) does not predict special education placement. Rather, these children (especially boys) are more likely to be retained in grade as an alternative approach in addressing poor school performance. Family socioeconomic risk at birth is a significant predictor of the need for remedial services. The authors also assess whether a high-quality preschool program offered at the ages between 3 and 4 can reduce the negative effects of low family socioeconomic status and birth weight on the need for special education and grade retention. Preschool participation in the Child-Parent Centers is found to reduce the likelihood of school remediation. The effects of preschool are greater for children from families with higher levels of socioeconomic disadvantage. The beneficial effects of preschool on special education placement are also larger for boys than for girls. (Contains 5 tables and 3 figures.)