Charter schools have grown in popularity, as both citizens and government officials search for ways to improve public education in America. Much of the research on charter schools focuses on academic performance comparisons between charter schools and traditional public schools. Far less attention has been devoted to whether the presence of charter schools creates marketlike environments that bring about systemic improvements in public education. This study examines the extent to which charter schools stimulate performance gains in traditional public schools. The results show that charter schools contribute to modest overall performance improvements for students enrolled in traditional public schools. Charter schools help bring about stronger performance gains for low-income students enrolled in traditional public schools. The presence of charter schools also affects how financial and programmatic resources are allocated in traditional public schools.