The objectives of the current study were to document the effects of discrimination on Latino mental health and to identify the circumstances by which ethnic identity serves a protective function. Instances of discrimination and depressive symptoms were measured every day for 13 days in a sample of Latino adults (N= 91). Multilevel random coefficient modeling showed a 1-day lagged effect in which increases in depression were observed the day following a discriminatory event. The findings also revealed differential effects of ethnic identity exploration and commitment. Whereas ethnic identity exploration was found to exacerbate the influence of daily discrimination on next-day depression, ethnic identity commitment operated as a stress buffer, influencing the intensity of and recovery from daily discrimination. The findings are discussed within a stress and coping perspective that identifies appropriate cultural resources for decreasing the psychological consequences associated with daily discrimination.(PsycINFO Database Record (c) 2016 APA, all rights reserved)