Many schools choose to organise students into classes according to their perceived "ability", despite evidence that the practice is not beneficial for students, overall. Class grouping by "ability" can exacerbate existing social inequalities by segregating students according to pre-existing educational advantage, which has unjustifiable consequences from a social justice perspective. There is little understanding of "how" decisions about class groupings are made, but such understanding is a crucial basis for exploring the persistent prevalence of this inequitable and exclusionary practice in Australian schools. This study characterises within-school processes used to decide how to group students into classes. Surveys were completed by n = 147 schools regarding their class organisational practices, with follow-up interviews conducted with n = 12 participants. Findings suggest that schools draw on prior achievement data to form class groups, but for different purposes. Other sources of information were considered when allocating students into classes, including student effort, behaviour, and parent requests. The schools did not change their grouping practices often, but there was continual consideration of how changes might better meet students' needs. Further research might consider how schools can be supported in evaluating and revising their class grouping practices, including how students are allocated to class ability groups.