About 70 percent of all Black students attend schools where more than half of students are non-white. By contrast, just 13 percent of white students attend predominately nonwhite schools. Such disparate enrollments mirror longstanding differences across racial groups in educational and economic outcomes, including Black-white gaps in educational achievement, wages, and economic mobility. In this study, the authors focus on one potential driver of racial gaps in adulthood: special education identification. Research has consistently found that minority students are identified with disabilities at higher rates than white students, based on straightforward comparisons of classification rates across racial groups. Such comparisons are how federal special education law defines and regulates "disproportionality" in the share of students identified with a disability within schools and districts, which triggers increased monitoring and intervention by states. But recent research has shown that the story becomes more complex when minority students are compared not to all white students, but to white students of similar socioeconomic status. These studies find that minority students are less likely than otherwise similar white students to be identified for special education. This finding raises the possibility that Black and Hispanic students may be less likely to receive the specialized services they need. Is "disproportionality," as it is typically understood and measured, the real problem? What role does school segregation play in special education rates? The authors explore these questions by examining the birth records and eventual special education status of every child born in Florida between 1992 and 2002. The birth records capture both infant and maternal health, as well as demographics and economic circumstances, allowing the comparison between students born into similar circumstances whose observable characteristics differ only by race and the racial compositions of their local schools. The results show that Black and Hispanic students are placed in special education more often than their peers when they are in majority-white schools. But in predominately minority schools, when surrounded by other non-white students, Black and Hispanic students are less likely to be placed in special education. The authors' estimates suggest that minority students in heavily-minority school groups are underrepresented in special education relative to their underlying incidence of disability. While public debate has fixated on the harmful effects of too many Black and Hispanic students being identified as having special needs, the results echo the recent research suggesting that, in fact, too few minority students are being provided the educational services they need to thrive. Given ongoing public focus on equity and disproportionality, and the longstanding goal of closing gaps in educational achievement between white and non-white students, such widespread underrepresentation has substantial implications.