This paper reports the findings of an exploratory study that analyzed relations among schools located in a Portuguese municipality where these organizations were officially authorized to compete with one another for students. The data were collected through semi-structured interviews with school leaders. The findings show that despite the formal possibility of inter-school competition within an educational market framework, there was no significant competition among the schools, and that their leaders managed their relations with other organizations in accordance with collaborative principles. The paper addresses some of the factors that may account for this and which provide a useful illustration of the specific nature of local educational environments, within the context of the global introduction of market mechanisms in education systems.