Scholars call for more attention to how marginalization influences the development of low‐income and racial/ethnic minority youth and emphasize the importance of youth's subjective perceptions of contexts. This study examines how beliefs about the fairness of the American system (system justification) in sixth grade influence trajectories of self‐esteem and behavior among 257 early adolescents (average age 11.4) from a diverse, low‐income, middle school in an urban southwestern city. System justification was associated with higher self‐esteem, less delinquent behavior, and better classroom behavior in sixth grade but worse trajectories of these outcomes from sixth to eighth grade. These findings provide novel evidence that system‐justifying beliefs undermine the well‐being of marginalized youth and that early adolescence is a critical developmental period for this process.