An educational reform was carried out in Sweden in the early 1990s. This reform involved implementing a far reaching policy of freedom of choice. The reform resulted in an increased establishment of independent schools, competition between schools and gave cause to substantial student flows between different city districts and public and independent schools. This study focuses on three public compulsory schools in Stockholm city with a striking inflow of students from socially disadvantaged suburbs, and an outflow of students to other schools. The aim is to describe and analyse how school leaders, teachers, parents and students relate to, and make use of, the freedom of choice policy. The study revolves around the following questions: How does the policy affect the schools’ positions in the field of education? How can the inflow of students be explained? How does the increased diversity affect identity formation and social relations among students? How can the outflow of students living within the schools’ catchment areas be explained? The empirical data were collected through an ethnographic fieldwork over the course of one year, using different techniques foremost observations, focus groups and interviews. My theoretical point of departure is that an understanding of these processes must take societal structures and social positions, as well as individual and institutional factors, into account. In my analyses I draw on Bourdieu’s theoretical framework and concepts such as field, habitus, capital and social space. The findings suggest that the schools’ positions, and the actors’ practices, are determined by objective factors, but that surrounding social and symbolic structures also plays an important role. Symbolic capital associated with “Swedishness”, and characteristics ascribed to stigmatized suburbs and the better-off inner-city districts, are important factors to understand the student flows and the development at the studied schools.