The assertion that choice-driven competition between schools will improve school quality rests on several largely unexamined assumptions. One is that choice increases the competitive pressure experienced by school leaders. A second is that schools will seek to become more effective in response to competitive pressure. In this article, we use responses from a survey of Milwaukee public school principals to examine these assumptions. Our results suggest that there is a substantial amount of variation in how principals experience competitive pressure. Somewhat surprisingly, the extent to which principals perceive competition for students is not related to geographic factors such as the number of nearby schools. However, perceptions of competition are related to student achievement as well as to transfer rates out of a school. Although some schools respond to competition by trying to improve through curricular or instructional changes, a more common approach is to use outreach or advertisement.