This paper reports a study which examined perceptions and experiences of classroom racism among nursing students and lecturers, and explored the ability of lecturers to address it. The project is set against a backdrop of the legal duty of publicauthorities to address racism and promote equality, yet they often lack the ability or commitment to do so. Institutional racism must be addressed if nursing students are to learn effectively and become culturally competent practitioners in contemporary multicultural society. The qualitative study was informed by transcultural nursing theory. Focus groups were undertaken with 36 student nurses in each year of their training, and one group of 11 lecturers. Semistructured interviews were undertaken with two students and four lecturers. A team approach to data analysis was undertaken and combined methods, researcher and method triangulation aimed to ensure methodological rigour. The findings demonstrate evidence of racism, which was manifested in different ways and experienced by both students and lecturers. Societal, organisational and historical factors were involved and led students and lecturers to adopt coping strategies to limit anxiety and stress. These responses perpetuated ignorance and intolerance and occurred at individual and organisational level. It was not always clear whether behaviour or attitudes had racial underpinnings, but beliefs and ideas frequently originated in colonial history or earlier experiences. Although some examples of good practice were evident, many lecturers lacked confidence in tackling sensitive, emotive issues. Addressing institutional racism requires strategies that recognise the emotions, anxieties, fear and stress involved. In particular, lecturers need support and guidance to engage in transformative education which addresses feelings and emotions. Greater attention to pedagogical processes and classroom management is needed, and recommendations are made to support lecturers to become culturally competent.