There is a growing abundance of research on outcomes of charter schools for children, teachers, and communities, yet a paucity of research on why and how charter schools form in the first place. This article presents unique data on charter school applications to show how the early stages of school formation are embedded in, if not driven by, an organizational and institutional context. Three organizational theories-neoinstitutional, population ecology, and resource dependence-are used to explain the formation of charter schools. The results suggest that educational organizational environments are indeed key in the process of generating charter schools. Nonreligious private schools increase the submission of charter school applications, while the density of extant charter schools in local districts-or saturation, in general-decreases the submission of applications. Finally, local political environments and legislative support matter as well. Implications for understanding the formation of charter schools are discussed, as is the more general importance of understanding educational options as a function of organizational environments.