Path analysis was used to assess direct and mediating relationships of an a priori mediation model. Data were collected from 210 black, Hispanic/Latino, and Asian undergraduate college students. Authors found that microaggression was positively associated with ethnic identity. Microaggression had a significant positive association with psychological distress but no other direct relationships with the outcome variables. Ethnic identity was negatively associated with psychological distress but positively associated with self-esteem and academic self-efficacy. A positive effect was found between ethnic identity and substance abuse. Ethnic identity mediated the effect of microaggression on psychological distress. Moreover, including ethnic identity in the equation revealed that microaggression has a positive effect on self-esteem and academic self-efficacy through participants’ reported degree of ethnic identity. The results suggest that racial microaggressions have damaging impacts on the emotional health of racial and ethnic minority young adults. However, microaggressive experiences may also elicit stronger ethnic identity, which appears to serve as a protective factor to the negative influence of microaggression on psychological well-being. Post hoc exploratory multigroup analysis revealed some differential findings for each group. The article concludes with a discussion of the implications for social work practice, education, and research.