This study investigated student perceptions of differences in academic and social effects that occur when gifted and talented youth are grouped homogeneously (i.e., in special classes for gifted students) as contrasted with heterogeneously (i.e., in classes with many ability levels represented). Forty-four students in grades 5-11 completed interviews or questionnaires while attending a summer residential program for gifted and talented students. Questions were designed to clarify the nature of academic and social outcomes under the two grouping conditions. On the whole, the participants perceived homogenous grouping more positively with respect to academic outcomes. They learned more in the more challenging environment provided by homogeneous classes. However, they had mixed feelings about which setting better met their social needs. Participants seemed to value having both similar peers in homogenous classes and the social diversity, of heterogeneous classes. A troubling finding that emerged was the preference of a few of the students for heterogeneous classes because they were easier and enabled them to attain a high class ranking with little work. Implications of the findings for educators and counselors of gifted students are discussed.