Multi-level analyses of data on 18,519 families with opposite sex children from NFHS-3 are used to test the impact of maternal son preference and context on the gender differential in education in India. The results show that girls are at a greater educational disadvantage compared to their brothers in families with maternal son preference. Mother's education is shown to reduce the effect of son preference and to reduce the bias against daughters. Additionally, there is more gender inequality in education in communities with high levels of maternal son preference and low women's status. Importantly, a family's location in a community or region with higher women's status explains much of the effect of maternal son preference on the gender disparity. The importance of context is further solidified by significant interaction effects showing that the negative effect of mother's education is modified by context.