This analysis is about the role of poverty in school reform. Data from a number of sources are used to make five points. First, that poverty in the United States is greater and of longer duration than in other rich nations. Second, that poverty, particularly among urban minorities, is associated with academic performance that is well below international means on a number of different international assessments. Scores of poor students are also considerably below the scores achieved by white middle-class American students. Third, that poverty restricts the expression of genetic talent at the lower end of the socioeconomic scale. Among the lowest social classes environmental factors, particularly family and neighborhood influences, not genetics, is strongly associated with academic performance. Among middle-class students it is genetic factors, not family and neighborhood factors, that most influences academic performance. Fourth, compared to middle-class children, severe medical problems affect impoverished youth. This limits their school achievement as well as their life chances. Data on the negative effect of impoverished neighborhoods on the youth who reside there is also presented. Fifth, and of greatest interest, is that small reductions in family poverty lead to increases in positive school behavior and better academic performance. It is argued that poverty places severe limits on what can be accomplished through school reform efforts, particularly those associated with the federal No Child Left Behind law. The data presented in this study suggest that the most powerful policy for improving our nations' school achievement is a reduction in family and youth poverty.