This study uses data from the Youth in Transition Survey (YITS) and the Programme for International Assessment (PISA) to measure the difference in reading performance between students in rural and urban schools in each Canadian province and to identify factors that may help to explain rural-urban differences. The study looks at some of the factors that help us to understand differences in the reading performance of rural and urban students and examines how differences in family, school and community environments relate to the rural-urban reading gap. The study found that rural students were more likely than urban students to come from families with lower socioeconomic backgrounds. The parents of rural students tend to be less well-educated and less likely to be employed in professional occupations, such as doctors, lawyers and bankers. These differences, however, do not explain the gap in performance between rural and urban students. Even if one were to compare rural and urban students whose parents had the same level of education and the same occupation, the reading difference would still remain. Moreover, the rural-urban gap cannot be attributed to differences in rural and urban schools because, for the most part, rural and urban schools are much the same. In fact, Canadian students ranked high internationally, in part, because there are few significant differences between Canadian schools overall. Instead, this study shows that the difference between rural and urban reading performance is most strongly related to community differences. Relative to the urban communities, rural communities were characterised by lower levels of education, fewer jobs, and jobs that were, on average, lower earning and less likely to require a university degree. Appendices include (A) Tables; (B) Definitions and Concepts; (C) Analytical Methodology; and (D) Survey Concepts, Methodology and Data Quality. (Contains 27 tables, 8 figures, and 14 endnotes.)