Over the last three decades, the political project of school choice policy, promoted by the Vancouver School District and the BC Ministry of Education, has been contentious. Many have contended that school choice further contributes to the fragmentation and associated hierarchies of the education system and of social structures in the urban context of Vancouver, a major city with rapidly rising ethnic diversity and socio-economically polarizing urban redevelopment. To shed further light on these concerns about school choice, in this study I investigate the ways in which young people, ages 11–19, positioned at various social, racial, and geographic locations and with varied social experiences, make sense of school choice policy. Here I focus particularly on the ways in which young people imagine, experience, and form certain modes of social, spatial, and racial identification and groups, as well as on the relationships between these groups under the mechanism of school choice. Between 2009 and 2010, I carried out a multi-sited ethnographic study from a critical socio-phenomenological perspective. I conducted 59 semi-structured interviews with students in transition (Grades 7, 8, and 12), observed 16 school information evenings and two secondary schools over a six-month period, and analyzed media discourses and policy texts as they pertained to broader social, urban, and political changes. I drew upon an interdisciplinary analytical framework of critical policy studies and youth studies and focused on three theoretical concepts: the imaginary, the imagination, and imaginary capital. These three concepts provide a key analytical framework for understanding the ways in which school choice complicates young people’s classification struggles and distinction-making (Bourdieu, 1984) within the widely circulating dominant social, urban, and national imaginary. I conclude that while current local policies of school choice can provide enriched alternative programs, they do so for only highly selective and competitive groups of students. Overall, my research findings point to the reality that school choice deepens existing social, spatial, and racial divisions, aggravates tensions, and ultimately worsens existing inequalities while producing new forms of social and educational stratification in the rapidly diversifying global city of Vancouver.