A growing literature has documented the importance of school socio-economic status (SES) composition to children’s academic performance, but the channels through which school SES affects individual achievement remain poorly understood. We investigate differences in 15-year-old children’s reading performance across schools with different levels of mean SES composition in six European countries where children are sorted into different academic and vocational tracks after the age of 15. This study contributes to the literature on the role of school SES composition for students’ academic achievement by examining the extent to which individual student SES and academic aspirations, classroom climate and school resources account for school SES differences. Multilevel regression analyses of reading literacy scores from PISA 2018 indicate sizeable effects of school SES composition on reading achievement in each of the six countries, even after accounting for student SES. By limiting the analysis to students who had not yet been tracked based on their academic record or aspirations, we can better focus on the link between school SES composition and educational achievement. Our main finding is that school SES composition differences are more than a function of students’ own SES, as they also reflect classroom discipline, teaching practices, peer educational aspirations, and to a lesser extent, school resources.