Despite both requirements of and support for universal education up to grade 9, there are concerning reports that China is still suffering from high and maybe even rising dropout rates in some poor rural areas. Unfortunately, besides aggregated statistics from the Ministry of Education (which show almost universal compliance with the nine year compulsory education law), there is little independent, survey-based evidence on the nature of dropout in China. Between 2009 and 2010 we surveyed over 7,800 grade 7, 8, and 9 students from 46 randomly selected junior high schools in four counties in two provinces in North and Northwest China to measure the dropout rate. We also used the survey data to examine the factors that are correlated with dropping out, such as the opportunity cost of going to school, household poverty, and poor academic performance. According to the study’s findings, dropout rates between grade 7 and grade 8 reached 5.7 percent; dropout rates between grade 8 and grade 9 reached 9.0 percent. This means of the total number of students that matriculated into junior high school (those who were attending school during the first month of the first term of grade 7), 14.2 percent had left school by the first month of grade 9. Dropout rates were even higher for students that were older, from poorer families (and families in which the parents were not healthy), or were performing more poorly academically. We conclude that although the government’s policy of reducing tuition and fees for junior high students may be necessary, it is not sufficient to solve the dropout problem.