The present study examined contextual influences on the relationship between racial discrimination (individual, cultural, and collective/institutional) and psychological well-being. Two hundred and fifty two African American adolescents (46% male and 54% female, average age = 16) completed measures of racial discrimination, self-esteem, depressive symptoms and life satisfaction. Archival information regarding the racial/ethnic composition of the participants' neighborhoods and schools was used and increased school diversity was linked to increased perceptions of cultural discrimination. Regardless of school and neighborhood diversity, high perceptions of collective/institutional discrimination were linked to lower self-esteem for students in high diversity settings. Further, high levels of collective/institutional discrimination were associated with lower life satisfaction for African American youth in low diversity settings.