This paper examines the impact of racial identity on behavior in trust games played by public high school students in South Africa. There is a systematic pattern of distrust towards Black partners, even by Black proposers, partially attributable to mistaken expectations. Non-Black proposers are significantly less likely to engage in a strategic interaction at all when paired with a Black partner, while Black proposers engage in exchange but at lower levels than when paired with non-Blacks. However, greater racial diversity in public schools promotes pro-social behavior towards Black partners.