This review provides an overview of the existing empirical research of the multiple ways by which discrimination can affect health. Institutional mechanisms of discrimination such as restricting marginalized groups to live in undesirable residential areas can have deleterious health consequences by limiting socio-economic status (SES) and creating health-damaging conditions in residential environments. Discrimination can also adversely affect health through restricting access to desirable services such as medical care and creating elevated exposure to traditional stressors such as unemployment and financial strain. Central to racism is an ideology of inferiority that can adversely affect non-dominant groups because some members of marginalized populations will accept as true the dominant society's ideology of their group's inferiority. Limited empirical research indicates that internalized racism is inversely related to health. In addition, the existence of these negative stereotypes can lead dominant group members to consciously and unconsciously discriminate against the stigmatized. An overview of the growing body of research examining the ways in which psychosocial stress generated by subjective experiences of discrimination can affect health is also provided. We review the evidence from the United States and other societies that suggest that the subjective experience of discrimination can adversely affect health and health enhancing behaviours. Advancing our understanding of the relationship between discrimination and health requires improved assessment of the phenomenon of discrimination and increased attention to identifying the psychosocial and biological pathways that may link exposure to discrimination to health status.