This study investigates the changing racial diversity and structure of metropolitan neighborhoods. We consider three alternative perspectives about localized racial change: that neighborhoods are bifurcating along a white/nonwhite color line, fragmenting into homogeneous enclaves, or integrating white, black, Latino, and Asian residents into diverse residential environments. To assess hypotheses drawn from these perspectives, we develop a hybrid methodology (incorporating the entropy index and majority-rule criteria) that offers advantages over previous typological efforts. Our analysis of 1990-2000 census tract data for the 100 largest U.S. metropolitan areas finds that most neighborhoods are becoming more diverse and that members of all groups have experienced increasing exposure to neighborhood diversity. However, white populations tend to diminish rapidly in the presence of multiple minority groups and there has been concomitant white growth in low-diversity neighborhoods. Latino population dynamics have emerged as a primary force driving neighborhood change in a multi-group context.