Protective effects of ethnic identity on individuals’ daily psychological well-being were examined in a sample of 415 ninth grade adolescents from Mexican and Chinese backgrounds. Utilizing daily diary assessments and multilevel modeling, adolescents with a higher regard for their ethnic group were found to have greater levels of daily happiness and marginally less daily anxiety averaged over the two-week study period. Ethnic regard also moderated the daily association between normative stressful demands and happiness, as well as the association between stressful demands and happiness experienced one day after the original stressors occurred. Moderating effects were found even after controlling for self-esteem. Results point to the positive influence of ethnic identity in adolescents’ daily lives.