Since the 1996 Peace Accords, bilingual education in Guatemala has become a major concern among educators, but little is known about how teachers of different ethnicity view and interact with Mayan and ladino children. Using terminology employed by teachers as a basis for cognitive categorization of ethnicity, cultural domain analysis examined teachers' perceptions of student characteristics. The categorizations were then related to observed teacher-student interaction in rural primary school classrooms. The results suggest ethnic and cultural differences in teacher cognition, as ladino teachers categorized Mayans more positively and were highly homogeneous in their classification of indigenous students and Mayan teachers viewed ladino students more positively and were more homogeneous in their classification of students like themselves. Both teachers and students initiated more interactions with those of their own ethnicity. The findings support the greater use of Mayan teachers, but in multiethnic settings there may not be equal learning opportunities for students who do not share their teachers' ethnicity.