In this study, we monitored 470 university students’ smartphone usage continuously over 2 years to assess the relationship between in-class smartphone use and academic performance. We used a novel data set in which smartphone use and grades were recorded across multiple courses, allowing us to examine this relationship at the student level and the student-in-course level. In accordance with the existing literature, our results showed that students’ in-class smartphone use was negatively associated with their grades, even when we controlled for a broad range of observed student characteristics. However, the magnitude of the association decreased substantially in a fixed-effects model, which leveraged the panel structure of the data to control for all stable student and course characteristics, including those not observed by researchers. This suggests that the size of the effect of smartphone usage on academic performance has been overestimated in studies that controlled for only observed student characteristics.