This study examines the racial discourses of six and seven year old Puerto Rican children participating in small group literature circles over one academic year. The main research question is "How do Puerto Rican young children in a multiage classroom construct race through dialogue within the figured worlds of literature circles?" This study is based on teacher research qualitative research design, using methods and techniques from ethnography and case study research. This study describes the dialogue of 20 Puerto Rican children, during 6 literature circles. These were chosen as case studies to examine student's racial ideological explorations in depth. Data gathering methods included field notes from participant observation, audiotapes, videotapes, and transcripts. A detailed description and analysis of children's responses to literature, this study documents how young Puerto Rican children's ambiguity and inconsistent usages and meanings of racial terminologies to signify their worlds. Through emerging ideological discourses such as colorblindness and esentializing discourses, young children explore discomfort instead of neutral, inclusive and unifying racial constructions, along with racial harmony that celebrates goodwill and benevolence. Literature circles as figured worlds informed by Rosenblatt's reader-response theory and Holland, Lachicotte, Skinner and Cain (2003) social practice theory of identity, are proposed to be a space were racial identities form and reform, facilitating variable forms of racial talk. The findings of this research illustrate the importance of teacher research as one form of qualitative research to illustrate the complexity of children's racial talk aimed toward educational racial understandings and change. The importance of racial discourses in young children's racial explorations to signify their worlds. [The dissertation citations contained here are published with the permission of ProQuest LLC. Further reproduction is prohibited without permission. Copies of dissertations may be obtained by Telephone (800) 1-800-521-0600. Web page: http://www.proquest.com/en-US/products/dissertations/individuals.shtml.]