This paper examines the trade-off between educational equity and student achievement by analyzing Taiwan’s 2014 exam-free high school admission reform, which substantially reduced ability-based tracking. Using a difference-in-differences design comparing high school students exposed to the reform with unaffected middle school students, this paper finds that the reform increased within-school heterogeneity by 30 points (effect size=0.86), evidence of a major weakening of ability-based sorting across schools. Consistent with the policy’s equity objectives, low-performing students gained access to better schools, more qualified teachers, and higher-achieving peers. These equity gains, however, came at a clear cost: average performance declined by 50 points (0.18 standard deviations), with negative effects spread uniformly across the achievement distribution. A triple-difference design analysis yields consistent results. Overall, this study’s findings reveal a pronounced equity-achievement trade-off, showing that detracking can expand educational opportunity while reducing overall academic performance.