Despite extensive research over the past four decades, a number of issues concerning the historical and current development of African American Vernacular English (AAVE) remain unresolved. This study utilizes a unique sociolinguistic situation – a long-standing, isolated, biracial community situated in a distinctive dialect region of coastal North Carolina – to address questions of localized dialect accommodation and ethnolinguistic distinctiveness in earlier African American English. A comparison of diagnostic phonological and morphosyntactic variables for a sample of four different generations of African Americans and a baseline European American group shows that considerable accommodation of the localized dialect occurred in earlier African American speech. Nonetheless, certain dialect features – e.g., copula absence and 3rd person verbal s marking – were distinctively maintained by African Americans in the face of localized dialect accommodation; and this suggests long-term ethnolinguistic distinctiveness. Cross-generational change among African Americans indicates that younger speakers are moving away from the localized Pamlico Sound dialect toward a more generalized AAVE norm. Contact-based and identity-based explanations are offered for the current trend of localized dialect displacement.