This article critically examines the empirical scholarship that applies institutional habitus, a conceptual extension of Bourdieu's theory of practice, to investigations of higher education. Given Bourdieu's extensive scholarly focus on higher education as well as the field's undertheorization of its own exclusionary history, application of institutional habitus to higher education is particularly apt. This critical appraisal finds that the reviewed scholarship corroborates the concept's value by drawing attention to the role of institutional habitus in differentially privileging and rewarding students based on their possession of institutionally legitimized knowledge, values, and behaviors. Nevertheless, this review reveals a series of missed opportunities, including a tendency to conflate individual and institutional habitus and limited attention to the impact of institutions' own social status. These oversights dampen the theoretical and empirical richness of the concept and obscure a significant influence on institutional beliefs and behavior as well as a mechanism of exclusion for marginalized populations. After discussing contributions and critiques of the reviewed scholarship, I propose a definition of institutional habitus that centers the social position of educational institutions as the primary avenue through which social power influences institutional practice and offer a set of guiding principles to inform the application of institutional habitus within education research. It is argued that such robust operationalization of institutional habitus would greatly enhance organizational analysis within educational contexts by helping scholars and practitioners to identify and remediate the institutional mechanisms that facilitate student failure. In clarifying this problem, different, and perhaps more equitable, solutions may emerge.