This study uses a year of ethnographic fieldwork, over 50 informal ethnographic interviews in a racially diverse neighborhood in Milwaukee, WI, and formal interviews with 30 neighborhood residents, workers, and business owners, to examine how neighborhood residential diversity affects cross-racial interactions there. The study found that, despite the racial diversity present within many neighborhood spaces, spatial and temporal micro-segregation limits cross-racial social interactions. Further, though residents regularly traverse racial-spatial boundaries in the neighborhood, the temporary and shallow nature of these crossings contributes to a persistence in social distance between people from different racial groups. Contrary to the contact hypothesis, the findings show that consequential interracial contact often fails to occur even in racially diverse micro-spaces.