A major shortcoming of macro-spatial research undertaken to date in Israel pertains to the neglect of state investment-related measures and the extent to which they mediate unequal opportunities to learn (OTL) and educational opportunities between localities. In the present study, OTL refer to class size and high-school tracking patterns. Educational opportunities refer to two measures: the school system's holding power and access to educational credentials. Two specific questions were raised in this respect: first, we looked into the extent to which the size and ethnic stratification of Israeli localities, and their differential dependence on state financial schemes, affect available OTL and educational opportunities. Second, we examined how a locality's OTL affect educational opportunities. The data on which the present study is based are aggregated at locality level and refer to 89 localities, of which 21 were Arab and 78 were Jewish. Bentler's EQS Structural Equation Modeling (SEM) program was applied to test the research questions. The findings suggest that locality characteristics and dependence on state finance directly affect both OTL and educational opportunities. However, the school system's holding power and access to educational credentials is affected by differential mechanisms. On the one hand, locality-level variables and average class size significantly affect the school system's holding power. On the other hand, access to educational credentials is affected primarily by a locality's ethnic affiliation and its dependence on state funding. The implications of these findings for educational policy and reform are then discussed.