Roma urban enclaves can be characterised as social peripheries or so-called excluded localities in which poverty and unemployment are concentrated. The separation of the Roma from the majority occurs both in the social space and in the educational system through the existence of sub-standard, low-demanding basic schools, where the majority of students are Roma. Both spatial and educational exclusion have become the subject of public debate, policies, and, in the case of schools, of international legal disputes. In the article the authors ask what mechanisms lie behind the existence/functioning of ‘Roma schools’ in the vicinity of deprived urban enclaves with Roma populations. To answer this question they introduce the concept of ethnically segmented local education markets, which emerged in large cities after 1989. These markets interconnect deprived Roma localities with ‘Roma schools’ and are a part of the wider problem of the low social mobility of segregated urban Roma. The authors show that the ethnically segmented education market is shaped by three factors: (a) the spatial structure, (b) the institutional framework, including law and policy as well as schools, and (c) the educational strategies of both Roma and non-Roma parents. The data the authors used in the analysis came from the Czech part of an international quantitative and qualitative study in which more than 920 questionnaires were completed by students and teachers and 80 interviews were conducted with students, parents and teachers in two large Czech cities. For a better understanding of the authors’ basic argument they chose just one segmented local market as an illustrative example.