This study examined how adolescents make meaning of racist jokes and their impact on daily well-being using a sequential mixed-methods research design with interview (N = 20; 60% girls, 5% gender-nonconforming; 45% Asian American, 40% Latina/o/x, 10% Black, 5% biracial/multiethnic) and daily diary data (N = 168; 54% girls; 57% Latina/o/x, 21% biracial/multiethnic, 10% Asian American, 9% White, 4% Black). Qualitative results revealed that racist jokes were common, distinct from other overt forms of discrimination, and perceived as harmless when perpetrated by friends. Quantitatively, approximately half of adolescents reported hearing at least one racist joke during the study period, and racist jokes by friends were associated with higher daily angry, anxious, and depressed moods and stress. Racist jokes by known others and strangers were also significantly associated with poorer well-being, although less consistently. Findings highlight the hidden harmful effects of racist jokes on adolescents' daily mood and stress.