This article assesses the effects of home computers on school performance, and examines inequalities in educational payoff among those children who have home computers. We find that having a home computer is associated with higher test scores in mathematics and reading, even after controlling for family income and for cultural and social capital. However, children from high socioeconomic status (SES) homes achieve larger educational gains from home computers than do lower SES children. Boys' performance advantage is larger than girls'. Ethnic minorities gain far less of a performance boost than whites. Home computing may generate another ''Sesame Street effect'' whereby an innovation that held great promise for poorer children to catch up educationally with more affluent children is in practice increasing the educational gap between affluent and poor, between boys and girls, and between ethnic minorities and whites, even among those with access to the technology.