Despite numerous studies on educational disparities in U.S. adult health, explanations for the disparities and their growth over time remain incomplete. The authors argue that this knowledge gap partly reflects an individualist paradigm in U.S. studies of educational disparities in health. These studies have focused largely on proximal explanations (e.g., individual behaviors) to the neglect of contextual explanations (e.g., economic policies). The authors draw on contextual theories of health disparities to illustrate how U.S. states, as institutional actors, shape the importance of education for health. Using two nationally representative data sets and seven health measures for adults aged 45 to 89 years, the authors show that the size of the educational gradient in health varies markedly across states. The size varies because of variation in the health of lower educated adults. The authors use state excise taxes on cigarettes to illustrate one way states shape educational disparities in health. These findings underscore the necessity of contextualizing these disparities.