How racial identity influences self-esteem and psychological well-being among African Americans remains unresolved due to unexplained inconsistencies in theoretical predictions and empirical findings. Using data from the National Survey of American Life (N = 3,570), we tested hypotheses derived from social identity theory and the internalized racism perspective. Findings support social identity theory in showing that African Americans strongly identify with their group and view it very positively. In addition, those who identify more with their group and evaluate it more positively have greater self-esteem, greater mastery, and fewer depressive symptoms. However, findings also support the internalized racism perspective by showing that when group evaluation is relatively negative, racial identification is related to lower mastery and higher depressive symptoms. We conclude that both social identity theory and the internalized racism perspective are necessary for understanding how racial identity is related to self-attitudes and mental health among African Americans.