Abstract Research has made significant contributions to our understanding of ethnic disparities in educational attainment, revealing amongst others the importance of parental and residential characteristics. Mixed empirical results, however, challenge the interpretation of why some ethnic groups face more difficulties in educational success than others, upholding contextual effects as a contested and inconclusive topic. This case study scrutinises the contextual underpinnings of ethnic diversity in the educational attainment of adolescents from various ethnic populations in Belgium's largest cities. Using full population individual‐level longitudinal census data (1991–2001), stratified multilevel ordinal models focus on the heterogeneous role of household characteristics – parental education and household composition – and neighbourhood characteristics – ethnic density, coethnic representation and deprivation – in young native and ethnic minority populations. While this Belgian case study shows that parental education and residential environment contribute to educational outcomes of all young adults in similar ways, it also points at two ethnic‐specific dynamics. First, contextual socioeconomic advantages are accumulated to a greater extent among native adolescents. Second, coethnic residential concentration shows a positive association with educational attainment for native and European‐origin children only. This paper reveals how the spatial separation of ethnic communities fosters differential opportunities for educational success, in particular for the most segregated population groups. If we want to better understand the complexities of native‐origin and minority youth embarking on differential educational trajectories, our study echoes the need for considering various sociospatial contexts in which people of different ethnic communities interact.