Beliefs about academic functioning play an important role in the academic development of students. This study considers perceptions about underachievement, that is, the degree to which accomplishments are believed to be in line with potential. In particular, we examined why these perceptions might deviate from measured underachievement, determined by regressing achievement on a measure of cognitive ability. Using data from the TALENT-study, a large-scale study among 3,409 Flemish 7th grade students, we observed student, teacher, and parent ratings of underachievement to be moderately associated with underachievement. Girls were less likely to be perceived as underachievers than boys at a similar actual level of underachievement, in particular by teachers and parents. Comparing different achievement domains (general, mathematics, and languages), this underestimation of female underachievement was found to be most pronounced in mathematics. Moreover, at a given level of measured underachievement, cognitive ability was negatively associated with perceived underachievement: as high ability underachievers often still achieve at an average level, the level of their underachievement might be underestimated. Although findings were consistent over different operationalizations of underachievement, measuring underachievement in terms of standardized test scores instead of grades led to weaker associations with perceived underachievement.