This action research study investigated the use of ability grouping during guided reading and if ability grouping had an effect on a student's self-efficacy. The study looks at three first grade classrooms during the 2019-2020 school year. Two of the classrooms used cross-classroom ability grouping focusing on student needs and book levels. The third classroom stayed self-contained and had groups of different levels and needs. Data was collected from Oral Running Records (ORR), the FAST assessments for sight words, word segmenting and sentence reading, and a self-efficacy questionnaire. The ORR's provided the students beginning book levels at the beginning of the year and in February. FAST provided student needs in reading. The comparing the scores from September and January. The self-efficacy questionnaire was given to students at the end of the study. Comparing the two different styles of grouping did not indicate statistical significance either on book levels or on a student's self-efficacy. Although, there was not a significant impact, the study did reveal that the two classrooms that implemented cross-classroom leveling made more gains in book levels and on their FAST assessment. It also showed that the students in those two classrooms had higher self-efficacy in both the lower group and higher group.