The purpose of the present study was to examine the role of cumulative ecological risk (i.e., neighborhood disadvantage and ecologically salient stressful events) and perceived discrimination on the psychological adjustment of urban African American and European American youth. Findings indicated that both cumulative ecological risk and perceived discrimination were associated with poorer psychological adjustment for youth in this study. Hierarchical regression analyses revealed that cumulative ecological risk made a unique contribution to each of the outcome variables. Moreover, perceived discrimination amplified the effect of ecological risk when delinquency was the criterion for African American youth but not for their European American peers. However, contrary to our expectations, perceived discrimination did not moderate the effect of ecological risk when depressive symptomatology was the outcome variable. (Contains 2 tables.)