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Many classroom climate studies suffer from 2 critical problems: They (a) treat climate as a student-level (L1) variable in single-level analyses instead of a classroom-level (L2) construct in multilevel analyses; and (b) rely on manifest-variable models rather than on latent-variable models that control measurement error at L1 and L2, and sampling error in the aggregation of L1 ratings to form L2 constructs. On the basis of an analysis of 2,541 students in Grades 5 or 6 from 89 classrooms, the authors demonstrate doubly latent multilevel structural equation models that overcome both of these problems. The results show that L2 classroom climate (a higher-order factor representing classroom mastery goal orientation, challenge, and teacher caring) had positive effects on self-efficacy and achievement. The authors conclude with a discussion of related issues (e.g., the meaning of L2 constructs vs. L1 residuals, the …