Poverty has a significant impact on the education of America’s youth, causing an income achievement gap in American PreK-12 schools. A large amount of research has been done on poverty’s effect on many aspects of schools, but few studies have addressed poverty’s role on student grades. A century of grading research has shown that teacher grading practices are rarely an accurate representation of student academic achievement, but rather a construct of unclear meaning containing both objective and subjective factors. Because these practices are so difficult to understand, several studies have investigated teacher grading decision making to attempt a more analytic assessment of the process that produces these grades. The purpose of this study was to investigate teachers’ grading decisions and the relationship to school poverty level in order to better understand the effectiveness of teacher grades in high-poverty schools. Using a causal-comparative design, the study was set in an urban California school district and used a sample of 251 high school teachers from 17 different high schools. A 35-item survey questionnaire was primarily used to determine the extent to which teachers used 17 different grading practices and were influenced by 13 different grading influences when creating report card grades. Results showed that teachers in low-poverty schools assigned significantly more A’s than in mid- and high-poverty schools, while most grading practices and grading influences were consistent across school poverty levels. A discussion includes an interpretation of results within the context of grading literature, including the importance of four grading influences in high-poverty schools: student success, teacher philosophy, school administrators, and student absenteeism. The study concludes with recommendations for teachers and administrators in high-poverty schools to create and utilize effective report card grades in an effort to address the income achievement gap.