This paper discusses the theoretical underpinnings and the empirical aspects of a recently completed national study on the impact of racism on the health and wellbeing of young Australians. This study was undertaken by Deakin University's Centre for Citizenship and Globalisation in partnership with the Foundation for Young Australians. The research employed a mixed methodology approach which included a cross-tabulated survey and semi-structured individual interviews designed to elicit data on the experiences of racism and its impact on health and wellbeing. The paper includes a discussion of methodological challenges and will provide a succinct summary of key findings and their implications for the future of race relations in Australia. This discussion is contextualised by a brief account of past and current Federal government policies regarding cultural diversity and how these impact upon the challenges and benefits of cultural diversity within Australian secondary schools.