Accumulating research suggests that racism may be a major determinant of health. Here we report associations between self-reported experience of racial discrimination and health in New Zealand. Data from the 2002/2003 New Zealand Health Survey, a cross-sectional survey involving face-to-face interviews with 12,500 people, were analysed. Five items were included to capture racial discrimination in two dimensions: experience of ethnically motivated attack (physical or verbal), or unfair treatment because of ethnicity (by a health professional, in work or when gaining housing). Ethnicity was classified using self-identification to one of four ethnic groups: Māori, Pacific, Asian and European/Other peoples. Logistic regression, accounting for the survey design, age, sex, ethnicity and deprivation, was used to estimate odds ratios (OR) and 95% confidence intervals (CI). Māori reported the highest prevalence of "ever" experiencing any of the forms of racial discrimination (34%), followed by similar levels among Asian (28%) and Pacific peoples (25%). Māori were almost 10 times more likely to experience multiple types of discrimination compared to European/Others (4.5% vs. 0.5%). Reported experience of racial discrimination was associated with each of the measures of health examined. Experience of any one of the five types of discrimination was significantly associated with poor or fair self-rated health; lower physical functioning; lower mental health; smoking; and cardiovascular disease. There was strong evidence of a dose-response relationship between the number of reported types of discrimination and each health measure. These results highlight the need for racism to be considered in efforts to eliminate ethnic inequalities in health.