Statisticians have shown the theoretical extent of parameter distortion when the classroom level is ignored in multilevel analyses of schooling. This article illustrates the practical consequences of omitting the classroom for inferences drawn about the extent and mechanisms of schooling effects, using the relationship between reading achievement, opportunity to learn, and student composition. Findings indicate that omitting the classroom level inflates estimates of school-level variance, while at the same time underestimating the overall extent of variance related to schooling effects. Classrooms also moderate the effects of educational opportunities. Finally, compositional effects typically conceptualized at the school level may be best defined at the classroom level. Ignoring classroom nesting in the analysis thus not only underestimates the overall impact of schools but presents a distorted picture of the mechanisms through which the schooling environment influences student achievement. Special attention is paid to considering how modeling choices may inform education policy efforts. (Contains 8 tables, 3 figures and 6 notes.)