Research has revealed an underlying link between identity construction and academic success for adolescents (Nasir & Saxe, 2003); however, research has not addressed how students' identities are formed and negotiated in the cultural practices of elementary school. This article examines how early elementary Mexican-origin bilinguals' racial, ethnic, and linguistic identities are constructed and negotiated during a literacy event on Martin Luther King, Jr. Using critical race theory (Ladson-Billings, 1999) and critical discourse analysis (Gee, 1999), a racial and power dichotomy in the text is uncovered. The moment-to-moment interactions around a text expose the students' understandings of race and the racial assumptions of the literacy practices. A critical discourse analysis of the moment-to-moment interactions shows the students' self-identify as "White." The teacher and researcher collaboratively examine how racial dichotomies in early elementary literacy texts and institutional practices affect the identity construction of young bilinguals. (Contains 1 endnote.)