There is substantial literature on the relationship between ability streaming and academic performance among students. This literature however is scanty on the relationship between ability streaming and academic inferiority feelings. The main aim of this study was therefore to investigate the relationship between ability streaming and academic inferiority feelings among students who do not perform well. Alfred Adler’s theory of individual psychology forms the theoretical framework of the study. The study adopted a mixed methods sequential explanatory research design. It was carried out in Kisii County, Kenya. The target population was all the Form Three students in public schools in Kenya (593711 students). Proportionate stratified sampling was used to select the top, average and low-ranking schools in the county. It was further used to stratify schools into boys’ boarding, girls’ boarding, mixed day and boarding and mixed day schools. Simple random sampling was used in the selection of the 400 respondents from 20 schools to form the sample. The research instruments were questionnaires and an interview schedule for the students administered by the researcher. Personal and academic self-concept inventory (PASCI) was used to collect data on academic inferiority feelings and Stephanie Soto Gordon’s questionnaire was used to collect data on ability streaming from students. A pilot study was used to validate and ensure reliability of the research instruments. Both descriptive and inferential statistical procedures were used to analyze data with the help of Statistical Package for Social Sciences (SPSS) version 20. The results were presented using frequency tables. The results showed that there was a relationship between ability streaming and academic inferiority feelings with most of the respondents having moderate feelings of academic inferiority i.e. 83%. Sex differences were found in ability streaming in regard to academic inferiority feelings. Boys experienced a slightly higher level of academic inferiority feelings with a mean of 67.11as compared to girls who had a mean 65.08. A major recommendation of the study among others was that the ministry of education should try to do away with ability streaming in schools which makes the students feel academically inferior.