Applying the research-based developmental assets list of 40 positive relationships, experiences, and values as a framework for positive youth development provides communities with a set of factors associated with increased healthy behaviors and fewer high-risk behaviors. Beginning with a question regarding the applicability of this model for youth across the spectrum of race and ethnicity in Colorado communities, this report discusses the importance of developing a deeper understanding of the concept of cultural competence as part of individual and community-wide asset building. The report's introductory remarks address the need for youth development approaches using the asset model to be culturally inclusive, relevant across ethnicities, and respectful of diverse childrearing methods, this report is presented in three sections. The report's first section then focuses on youth ethnic/cultural identity development and how cultural competence emerges in individuals and communities. The second section presents information on how practices based on this framework are adapted to strengthen the effectiveness of youth development in communities of color. A spiral model for cultural competence development and asset-building is presented reflecting greater engagement of the individual or organization. Examples of various Colorado organizations are presented portraying increased commitment to the asset-building approach and how asset awareness, relationship building, and networking have contributed to changes in adults' attitudes and perceptions of youth. Section 3 contains training materials, including a list of 40 developmental assets in Spanish and English versions, a list of Spanish proverbs related to various asset categories, and questions for introduction or team-building in group meetings. Autobiographical sketches in sidebars throughout the report depict identity formation for five individuals of various ethnic/racial backgrounds. Asset modifications for the American Indian community and for the Asian community are appended. (Contains 11 references.) (KB)