Ethnic-racial climate is a salient dimension of school context, especially amid the current sociopolitical climate. This study examined perceptions of school ethnic-racial climate among adolescent students of color, and the significance they place on being part of a diverse student population, in two urban middle schools, using interviews and focus groups. Qualitative analyses revealed that students' perceptions were contradictory. Students characterized their school interactions in meritocratic terms, where opportunities were grounded in equality and individual effort. However, their reports of racialized treatment were frequent, whereby ethnically segregated peer groups and the presence of stereotypes were prominent. Despite this, students articulated the benefits of school diversity, most notably, because it supported them in "mastering their dreams." Findings suggest that early adolescents are challenged with navigating the racialized context of the school environment. As such, schools must interrogate the promotion of colorblindness, in favor of practices that are more culturally affirming.