Today the ‘ghetto’ has become a key trope in both public and social science discourse on urban marginality in Germany – despite overwhelming empirical evidence that rejects the notion. The article traces the ‘ghetto’ as an imagined geographic space as well as social relation imbued with social meaning. It analyses the ghettoisation of residents in Berlin's marginalised zones in relation to the devaluation of educational capital attainable there. Centrally, it interrogates how the meaning young residents in these zones make of this on‐going process, and their responses to it, are inherent to the neoliberal project of the New Berlin Republic.