This article examines how variation in educational outcomes according to "place," or one's geographic environment, has been explained in educational theory. In a critical review of functional, conflict, cultural and institutional theory in education, the author describes the disciplinary perspectives and research that leave the mechanisms of student differentiation according to place largely undeveloped. By introducing two related concepts of endogenous capital, the author articulates macro- and micro-level systems of social mobility between and within schools according to place. The author contends the social organization and functioning of schools mirror and support the larger structure of place-based stratification in that they sort and allocate students into places within school that differentiate one's ability to convert the resources of the environment into social mobility.