This paper tests the hypothesis that stream placement influences teacher judgements of pupils, thus investigating a route through which streaming by 'ability' may contribute to inequalities. Regression modelling of data for 800+ 7-year-olds taking part in the Millennium Cohort Study examines whether teachers' reported perceptions of 'ability and attainment' correspond to the stream in which a pupil is situated. Children with similar characteristics, who perform equivalently on recent, independent, salient cognitive tests, and who have equal prior attainment, are compared. As predicted, stream level is associated with teachers' perceptions. The hypothesis that there is a relationship from stream placement to teacher judgement is supported.