This study examines the role of teachers' expectations in the association between children's socio-economic background and achievement outcomes. Furthermore, the role of children's ethnicity in moderating this mediated relation is investigated. In the present study, 3,948 children from kindergarten are examined. Data are analysed by means of structural equation modeling. First, results show that teachers' expectations mediate the relation between children's SES and their later language and math achievement, after controlling for children's ethnicity, prior achievement and gender. This result indicates that teachers may exacerbate individual differences between children. Second, children's ethnicity moderates the mediation effect of teachers' expectations with respect to math outcomes. The role of teachers' expectations in mediating the relation between SES and math outcomes is stronger for majority children than for minority children.