This study explores the impact of a momentous political event, the election of the nation’s first black president, Barack Obama, in 2008, on perceptions of racism and opinions about racial policy. A representative panel study of Americans interviewed immediately before and after the election reveals a roughly 10 percent decline in perceptions of racial discrimination. About one quarter of respondents revised their perceptions of discrimination downward. We explore several explanations for this decline. First, motivated-reasoning theory would predict larger declines among those whose priors tell them that racism was a diminished force to begin with. Second, changes could be concentrated among those who have the least contact with out-group members, or who are less knowledgeable about politics, and therefore weight Obama’s victory heavily in deciding how much racism exists in America. Third, based on theories of emotion and cognition, anxiety but not anger before the election might trigger substantial updating of beliefs. We found the drop in perceived discrimination to be widespread across groups in the population, with conservatives but not necessarily racially resentful whites exhibiting somewhat larger declines. Residential racial context had no effect on changes in perception, though declines were larger among the least politically knowledgeable. More notably, those citizens anxious but not angry before the election displayed much larger declines in perceived discrimination. Finally, declines in perceived discrimination were associated with increases in negative opinions of blacks and heightened opposition to both affirmative action and immigration.