The conditions that result in bicultural social development among Latino children and adolescents represent the central focus of this article. The literature surrounding bicultural development is reviewed from four perspectives: (a) immigrant children and adolescents, (b) second generation Latinos or the offspring of immigrants, (c) later generation ethnic children and adolescents, and (d) mixed ethnic and racial heritage individuals. Each of these situations presents different socialization contexts and challenges for parents and children in the transmission of culture across generations and for the development of bicultural competence. The concepts of acculturation, marginality, and biculturalism are examined for the assumptions inherent in each of these constructs. An important assumption in the analysis is that maintenance of ethnic identity and bicultural orientation may be imposed on Latinos depending on their phenotype, which marks them as "outsiders" to the dominant social group. Thus, ethnic loyalty and biculturalism may serve as positive coping responses in a racialized society.