This paper evaluates the Zones of Choice (ZOC) program in Los Angeles, a school choice initiative that created small high school markets in some neighborhoods but left traditional attendance-zone boundaries in place throughout the rest of the district. We study the impacts of ZOC on student achievement and college enrollment using a matched difference-in-differences design that compares changes in outcomes for ZOC schools and demographically similar non-ZOC schools. Our findings reveal that ZOC has boosted student outcomes markedly, closing achievement and college-enrollment gaps between ZOC neighborhoods and the rest of the district. These gains are largely explained by general improvements in school effectiveness rather than changes in student match quality, and the school-effectiveness gains are concentrated among the lowest-performing schools. We interpret these findings through the lens of a model of school demand in which schools exert costly effort to improve quality. The model allows us to measure the increase in competition facing each ZOC school based on household preferences and the spatial distribution of schools. We demonstrate that the effects of ZOC are larger for schools exposed to more competition, supporting the notion that competition is a key channel through which ZOC exerts its impacts. Demand estimates derived from rank-ordered-preference lists suggest families place substantial weight on schools' academic quality, and this weight provides schools with competition-induced incentives to improve their effectiveness. Our findings demonstrate the potential of public school choice to alter an important component of neighborhood quality, reduce neighborhood-based disparities in educational opportunity, and produce sustained improvements in student outcomes. [Funding for this report was provided by the Center for Labor Economics.]