Over the past several decades, cities across the U.S. have experienced gentrification and the associated socio-demographic shifts. As this phenomenon has accelerated, concerns about gentrification-induced displacement and its impacts on incumbent residents have grown. This paper studies the link between gentrification and displacement, identifying the social groups most likely to be displaced and the impacts on those displaced groups. The results provide evidence of displacement, showing that lower-income renters are significantly more likely to exit from gentrifying neighborhoods. Moreover, they tend to move to neighborhoods with significantly lower school quality and higher crime rates and have a higher probability of changing jobs and receiving lower incomes. Owners, however, are more likely to remain in gentrifying neighborhoods, benefiting from the increased amenities and rising home values. In stark contrast to renters, when these owners do move, they convert those capital gains into improved living conditions. These results provide direct evidence of how housing tenure defines the welfare consequences of environmental improvements.