This article develops a theoretical model for examining the interrelationship between ethnic identity and educational outcomes. The model is aimed at developing an understanding of why ethnicity may at times make a difference in academic performance and student empowerment. Ethnic identity is conceptualized as a product of multiple levels of societal structures in a dialectical relationship with the individual student, who constructs reality and responds to the constructions of others. The historical-social situation of minority university students in the People's Republic of China is used to develop and illustrate the model. The model includes macro components (such as the nation-state's designation of some groups as minority nationality or ethnic groups, and the social scientific construction of ethnicity) and micro-level components (such as the student's family and community background, significant life events, campus status hierarchies, campus interactional experiences and status negotiation by the student).