Grade retention is a common practice in some European school systems. With the growing movement towards inclusion and quality of schooling for all, and based on most empirical results, the application of grade retention as a measure to help students "catch up" is at the least a questionable practice. This study takes an inner look at this practice, conceptualised as a decision-making process. The role of the teacher is examined at the attitude-belief level (attitude towards retention, beliefs about general factors of school failure and factors to be taken into account in the decision), and more specifically at the judgement-expectancy level (teachers evaluate student characteristics and predict performance on achievement tests). Effects of attitudes and judgements on the probability of retention for comparable 2nd grade students are shown, and the longitudinal effects of retention on subsequent teacher's judgements and expectancies are reported. Consequences of results for teacher practice and education are discussed.