National datasets provide a unique opportunity to examine racial and ethnic disparities in health and mental health. In this article, the authors discuss some of the ways in which national datasets can facilitate our understanding of key pathways and mechanisms that explain racial and ethnic disparities and some of the conceptual and measurement issues that continue to hinder disparities research. Utilizing infant mortality and major depression as examples, the authors illustrate the complexity of studying racial and ethnic health and mental health disparities and argue that more thought and precision be utilized to study and explain these differences. Specifically, the authors argue that it is critical to disentangle population-level factors and individual-level characteristics to advance our understanding of disparities. The authors also contend that it is important for researchers to recognize the reciprocal relationship between the theoretical foundations and methodological innovations that must be integrated to effectively examine disparities. The authors conclude by discussing some of the benefits of researchers utilizing national databases that hold particular promise for addressing racial and ethnic disparities.