Lesbian, gay, and bisexual students (LGB) and those questioning their sexual orientation are often at great risk for negative outcomes like depression, suicidality, drug use, and school difficulties (Elliot and Kilpatrick, How to Stop Bullying, A KIDSCAPE Guide to Training, 1994; Mufoz-Plaza et al., High Sch J 85:52–63, 2002; Treadway and Yoakam, J School Health 62(7):352–357, 1992). This study examined how school contextual factors such as homophobic victimization and school climate influence negative outcomes in LGB and questioning middle school students. Participants were 7,376 7th and 8th grade students from a large Midwestern county (50.7% Female, 72.7% White, 7.7% Biracial, 6.9% Black, 5.2% Asian, 3.7% Hispanic, and 2.2% reported “other”). LGB and sexually questioning youth were more likely to report high levels of bullying, homophobic victimization, and various negative outcomes than heterosexual youth. Students who were questioning their sexual orientation reported the most bullying, the most homophobic victimization, the most drug use, the most feelings of depression and suicidality, and more truancy than either heterosexual or LGB students. A positive school climate and a lack of homophobic victimization moderated the differences among sexual orientation status and outcomes. Results indicate that schools have the ability to lessen negative outcomes for LGB and sexually questioning students through creating positive climates and reducing homophobic teasing.