We examine the effect of racial diversity on child stunting and underweight in post-apartheid South Africa, which has a strong history of systemic racial segregation. Using five waves of longitudinal data from the National Income Dynamics Survey (NIDS), and employing instrumental variable and propensity score matching methods, we find that racial diversity significantly reduces child stunting and underweight. This result is consistent across alternative measures of racial diversity, child stunting and underweight, and is also robust to different endogeneity-correction methods. The negative effect of racial diversity on child stunting and underweight is more pronounced among children under 5 years of age. Further analyses highlight increased employment opportunities, food expenditure per capita and financial inclusion as important channels through which racial diversity decreases stunting and underweight. We discuss the policy implications of these findings.