ABSTRACT Objective: Asylum seekers often experience ethnic discrimination on the flight or in the host country, which may be associated with chronic stress and impaired mental health. Dysregulation of the hypothalamic–pituitary–adrenal axis, a known physiological correlate of chronic stress, can be assessed using hair cortisol concentrations (HCC). The present study aimed to investigate how different forms of perceived ethnic discrimination are associated with mental health outcomes, HCC, and protective factors in asylum seekers living in Germany. Methods: Somatic symptoms (PHQ-15), symptoms of posttraumatic stress (PDS), depressive symptoms (PHQ-9), different forms of ethnic discrimination (active harm, passive harm, institutional discrimination), and protective factors (in-group identification, social support) were assessed cross-sectionally in 144 asylum seekers (average age 32 years, average duration of stay in Germany nine months; 67% men). HCC were obtained from 68 participants. Multiple regression analyses were conducted and social support and in-group identification were tested as potential moderators. Results: Active ethnic discrimination was positively associated with all assessed mental health outcomes, and all forms of ethnic discrimination positively correlated with depressive symptoms. Ethnic discrimination was not associated with HCC. When controlling for other possible influences (e.g. age, gender, traumatic events), passive harm was negatively associated with depressive symptoms (β = −0.17, p = .033) and active harm was positively associated (β = 0.28, p = .022) with somatic symptoms. After the inclusion of the protective factors, the associations were no longer significant. Lower social support was associated with higher depressive symptoms (β = −0.35, p < .001), posttraumatic stress (β = −0.77, p < .001), and somatic symptoms (β = −0.32, p < .001), but did not moderate the associations between ethnic discrimination and the mental health outcomes. Conclusions: Perceived ethnic discrimination may negatively influence asylum seekers’ mental health but does not seem to be associated with HCC. Social support was associated with psychological symptom severity, but did not buffer the effects of ethnic discrimination on mental health.