This article draws upon data from an in-depth ethnographic study of 5 and 6 year old children in an English multi-ethnic, inner-city primary school. It focuses on the significance of ‘race’ within young girls' peer-group relations and the ways in which the social dynamics that underlie those relations provide the context for understanding the particular nature and form that racism takes among the girls. This is done through a focus on the experiences of South Asian girls within the group. Within this, the article has two main aims. First, it aims to contribute to the literature within the sociology of education by extending the existing research focus on racism within teacher/pupil interactions to include an understanding of racism as it manifests itself among the children's peer-group relations. Second, in adapting and applying Pierre Bourdieu's concepts of capital and field, the article also offers a contribution to the literature within the sociology of ‘race’ and ethnicity by suggesting one potentially fruitful way in which racism can be understood within specific social contexts.