The practice of grouping students according to their abilities for instruction has been widespread but controversial. This study tackled the issue of how such a practice would affect the learners in school setting. A total of 865 Taiwanese vocational students who had been streamed into three level groups for English instruction were surveyed for the amount of impact they received due to the placement system. The results indicated that the impact of tracking did not vary significantly among different ability groups. Analysis of students' responses to the open-ended questions, nevertheless, indicated that the upper group was more affected academically, the middle group experienced more social impact, while the lower group seemed to be adjusting well psychologically.