Fish benefit energetically when swimming in groups, which is reflected in lower tail-beat frequencies for maintaining a given speed. Recent studies further show that fish save the most energy when swimming behind their neighbor such that both the leader and the follower benefit. However, the mechanisms underlying such hydrodynamic advantages have thus far not been established conclusively. The long-standing drafting hypothesis—reduction of drag forces by judicious positioning in regions of reduced oncoming flow–fails to explain advantages of in-line schooling described in this work. We present an alternate hypothesis for the hydrodynamic benefits of in-line swimming based on enhancement of propulsive thrust. Specifically, we show that an idealized school consisting of in-line pitching foils gains hydrodynamic benefits via two mechanisms that are rooted in the undulatory jet leaving the leading foil and impinging on the trailing foil: (i) leading-edge suction on the trailer foil, and (ii) added-mass push on the leader foil. Our results demonstrate that the savings in power can reach as high as 70% for a school swimming in a compact arrangement. Informed by these findings, we designed a modification of the tail propulsor that yielded power savings of up to 56% in a self-propelled autonomous swimming robot. Our findings provide insights into hydrodynamic advantages of fish schooling, and also enable bioinspired designs for significantly more efficient propulsion systems that can harvest some of their energy left in the flow.