Why do some schools bring forth high achievement levels, whereas others do not? To understand the mechanisms behind school success, one must examine schools as organizations and the social relations and interactions among their members. By integrating the literature on educational effectiveness and sociological institutionalism, this article presents a study of four successful and four failing schools in Sweden regarding the impact of schools' internal organization on student achievement. The results demonstrate that the two types of schools have distinct organizational characteristics, which show significant stability over time. Linking organizational characteristics and student outcomes, we argue that (a) the varying social reality of teachers and principals among the two types of schools fosters different types of actions and beliefs among teachers and principals, which (b) causes different learning environments for students that subsequently lead to variations in their learning trajectories.