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Racially diverse schools are often presented as places where students can learn to challenge racist discourse and practice. Yet there are a variety of processes through which such schools reproduce the very hierarchies they are meant to dismantle. Drawing on 18 months of fieldwork in two racially diverse South African high schools, I add to the literature by analyzing moments that threatened to undermine harmonious race relations. First, I focus on racially charged interpersonal incidents at school. Second, I examine how teachers dealt with topics of racial inequality that emerged in the context of the formal curriculum. School personnel addressed these challenges in ways that hindered discussions of interpersonal and structural racism. A normative climate limited students’ abilities to label racially charged incidents as racist. Further, teachers managed potentially conflictual classroom dynamics by downplaying the salience of contemporary racial stratification. I discuss the implications of these findings for scholarship on racial inequality in racially diverse schools.