We ask how the advantages and disadvantages in the educational careers of children of immigrants in Sweden are produced, making a theoretical distinction between mechanisms connected with school performance on one hand, and educational choice on the other. Using a new data set, covering six full cohorts of Swedish-born ninth-graders in 1998–2003 (N¼612,730), with matched school-Census information, we show that children of non-European immigrant origin are disadvantaged in their school performance but advantaged in their choice of academic upper secondary education. They have lower and more often incomplete grades, which force a sizeable proportion—10–20 per cent—into non-meritorious tracks or lead them to leave school. Given grades, children of non-European background make heterogeneous choices: many do not enrol in upper secondary education, but among those who do the propensity is high that they choose academic studies before vocational. In contrast, children of the ‘old’ (chiefly Nordic) labour immigrants are similar to the majority group in their equal preference for these two routes. A school system where choice plays a significant role appears to be advantageous for the often high-aspiring second-generation immigrant students, but greater efforts to reduce early achievement differences may still alleviate ethnic minority disadvantages.