U.S. universities are increasingly racially/ethnically diverse. Simultaneously, undergraduate graduation rates and alcohol use remain important concerns. Understanding factors that contribute to success and well‐being among students in these diverse college settings is critical to informing educational policy and programming. Polyculturalism is the belief that different racial/ethnic groups have always interacted, exchanged, and influenced each other, and it has been associated with more positive intergroup attitudes and greater comfort with diversity. Across four studies (three cross‐sectional, one longitudinal) with racially/ethnically diverse undergraduates at two diverse institutions in the Northeastern United States, controlling for potentially confounding variables (year in college, age, race/ethnicity, nativity, high school GPA, current GPA, endorsement of multiculturalism and colorblindness, self‐esteem, ethnic identification, general social anxiety, and mood across time points), greater endorsement of polyculturalism was associated with greater academic self‐efficacy, greater sense of belonging, less use of alcohol to cope with intergroup anxiety, and fewer adverse alcohol‐related consequences; further, lower intergroup anxiety mediated those associations. Results suggest studying polyculturalism and intergroup anxiety may contribute to our understanding of undergraduate outcomes at diverse institutions. Future work might explore how educational policy and programming can incorporate polyculturalism to promote engagement and well‐being of undergraduates at these diverse institutions.