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Dropping out of school has been associated with a student's ethnicity, socioeconomic status, challenging behaviours and low academic achievement. This paper describes research conducted with 1050 students aged 12-15, in three North Queensland urban high schools to investigate issues related to Indigenous and non-Indigenous students at risk of dropping out of school before gaining adequate qualifications. A path-analytic model was developed to assess the influence of socio-demographic, structural family and behavioural factors upon low academic achievement, the strongest predictor of dropping out of school. The specific hypothesis tested was that challenging behaviour, indexed by suspensions, predicts low academic achievement or at-risk status, more strongly than SES or family structure variables. Results indicate that for both Indigenous and non-Indigenous students, suspensions are a stronger predictor of low achievement than socioeconomic or family factors. Moreover, a model testing low achievement as a precursor to suspensions was not supported. Suggestions for future practice and research are proposed. [ABSTRACT FROM AUTHOR]