Transracial adoption in the United States has increased significantly in recent years. Crossing the color line within the intimate familial sphere has important implications for how institutions such as the family enable and constrain individuals' identity work. We explore how transracial family members utilize racial stereotypes and racialist understandings in everyday life, employing 30 in‐depth, life‐story interviews with both transracial adoptees and their white siblings. In attempts to accomplish a sense of belonging and authenticity, we argue that both transracial adoptees of color and their white siblings experience divergent and paradoxical expectations of familial and racial authenticity. We find that although they often utilized “color capital” in a quest for racial authenticity, in certain spaces and environments, they were expected to eschew their nonwhite identity and embrace “acting white” as purported by white family members and their “white debt” approach to racial socialization. This study adds nuance to the question of how families navigate the enduring power of the color line in relation to the reproduction of both material inequalities and racial discrimination.