We review evidence of racial discrimination as a critical and understudied form of adversity that has the potential to impact stress biology, particularly hypothalamic–pituitary–adrenal (HPA) axis activity. We highlight ethnic racial identity (ERI) as a positive regulatory influence on HPA axis activity, as indexed by levels of salivary cortisol. In past research by our group, Black individuals with high adolescent discrimination had low adult cortisol levels (hypocortisolism). Here, we present new analyses showing that ERI, measured prospectively from ages 12 through 32 in 112 Black and white individuals, is related to better-regulated cortisol levels in adulthood, particularly for Black participants. We also describe ongoing research that explores whether the promotion of ERI during adolescence can reduce ethnic–racial disparities in stress biology and in emotional health and academic outcomes.