This study draws on the social-discount and social-rejection hypotheses to examine the effect of perceived discrimination on immigrant youths' depressive moods, self-efficacy, and preferences for in-group socialization experiences. Data from a panel study of immigrant young adolescents (aged 12-18) who came to Israel from countries of the former Soviet Union during the preceding 6 years was used (n = 732). The average age of participants was 15.5 years; and 50% were boys. Partial support emerged for the social-rejection hypothesis: perceived discrimination increases depressive moods and reduces self-esteem. Yet increased perceived discrimination did not increase the preference for in-group socialization. Perceived discrimination seems to be detrimental to individuals' psychological well-being but apparently does not hinder social integration.