This study examined whether students who either had higher levels of cross-racial interaction during college or had same institution peers with higher average levels tend to report significantly larger developmental gains than their counterparts report. Unlike previous quantitative studies that tested cross-racial interaction using single-level linear models, this study more accurately modeled the structure of multilevel data by applying Hierarchical Linear Modeling (HLM). The general pattern of findings suggests that higher individual levels of cross-racial interaction have positive effects on students' openness to diversity, cognitive development, and self-confidence. The results also show that even though a student's own level of cross-racial interaction is a more direct and powerful way to realize developmental gains, just being in an environment where other students are interacting frequently also contributes to students' self-reported development. (Contains 4 tables.)