Parental depression constricts children’s development, but the mechanisms implicated—beyond daily parenting tactics—remain unknown. Today, parents must evaluate and select environmental contexts for child-rearing within increasingly complex residential and educational markets. Depression may hamper parents’ abilities to navigate this terrain, constraining information collection and impairing child-oriented decision-making. In turn, depressed parents’ children may lack access to developmentally enriching neighborhood, school, and child care settings. K–12 school sorting offers a strategic case to assess these expectations, given proliferating nontraditional options and school quality data. Analyses using the Los Angeles Family and Neighborhood Survey (N = 2,754) linked to administrative data suggest that depressed parents’ children attend magnet, charter, or private schools at lower rates than similarly situated children of nondepressed parents; depression-based disparities appear largest among Latino and Black families. The study motivates future research examining whether the depression-contextual selection link mediates intergenerational processes and exacerbates segregation.