Objective To examine the effects of the concentration of Latino students in elementary schools on Latino first graders’ test scores, and to determine if the effects vary by children's nativity status. Methods We use generalized estimating equations (GEE) on a sample of Latino first graders from the Early Childhood Longitudinal Study‐Kindergarten Class of 1998 (ECLS‐K). Results For math and reading, Latino concentration in schools improves students’ first grade test scores for Latino children of immigrants, but it has no effect for Latino children of U.S.‐born parents. For general knowledge test scores, Latino concentration has no effect for children of immigrants and has a deleterious impact on the scores of children of U.S.‐born parents. We also show no effect of Latino concentration on the scores of white children of U.S.‐born parents. Conclusions The results suggest that Latino concentration in elementary schools promotes educational outcomes for children from Latino immigrant families, but Latino families headed by U.S.‐born parents do not benefit from coethnic concentration, which is in accordance with expectations derived from assimilation theories.