Ethnic–racial identity (ERI) development and ethnic–racial discrimination are two salient experiences among adolescents in the United States. Despite growing awareness of the costs and benefits of these experiences individually, we know little about how they may influence one another. The current study examined competing hypotheses relating discrimination and components of ERI (i.e., exploration, resolution, affirmation) among a sample of Mexican‐origin adolescent mothers (N = 181; Mage at Wave 1 = 16.83, SD = 1.01) across six waves of data. Findings revealed that within‐person changes in discrimination predicted subsequent ERI resolution and affirmation; however, ERI did not predict subsequent discrimination. Between‐person effects of discrimination on affirmation were significant. Our findings underscore the importance of discrimination experiences in shaping Mexican‐origin adolescent mothers’ normative developmental competencies.