Grounded within an understanding of literacy as social practice, this dissertation interrogates the disconnect between the ways youth are positioning themselves in online spaces as text designers and the way they are viewed as literacy learners in many urban public schools. Using a connective ethnographic approach that blends place-based and virtual ethnographic methodologies, this qualitative ethnographic inquiry was designed to provide insights into the multiple ways in which youth from traditionally marginalized backgrounds engage with digital media across in-school, online, and out-of school spaces. Specifically, I gathered data through participant observation, interviews, and text collection over eighteen months inquiring into the digital mediated literacy practices of eighth-grade students attending a large underperforming urban middle school with a mandated standardized print-focused curriculum. Further, I drew on theories in new literacies to develop analytic tools that helped me discover some of the meanings that new digital mediums such as online social networking had for my research participants. Findings from this research have important implications for curriculum and pedagogy, as they reveal ways in which educators can design instructional experiences that build upon the skills that their students bring into the classroom, helping them to use these funds of knowledge to support their literacy development across in- and out-of school spaces. Further, this research complicates and disrupts the notion that standardized testing creates opportunities for youth in under-resourced communities to gain access to a high quality education through high-stakes accountability policies, and instead shows how allowing for students to show their knowledge through multiple modes creates opportunities for diverse youth to be recognized as successful in school.