Public Significance Statement COVID-19 has had a devasting effect on the physical health of racial minorities in the U.S., yet little is known about how pandemic-related racial discrimination has affected their mental health. Using newly validated scales, a national survey found distress caused by COVID-19-related victimization experiences and perceived increases in nationwide racial bias increased symptoms of anxiety and depression over and above the impact of preexisting health risks, employment and financial insecurity among American Indian/Alaskan Natives, Asian, Black, and Latinx young adults. The study underscores how the pandemic has created new pathways to mental health disparities among young adults of color by exacerbating societal inequities linked to race. Objective: U.S. young adult racial minorities have been disproportionately impacted by the coronavirus disease (COVID-19) pandemic in rates of infection and morbidity. Prepandemic racial discrimination has been associated with depression and general anxiety. However, the effect of coronavirus-specific forms of discrimination on mental health has not been examined. This study assessed the effect of social determinants of mental health and COVID-19-specific victimization and racial bias beliefs on depression and anxiety among young adults of color in the U.S. Method: A national online survey of 399 American Indian/Alaskan Natives, Asian, Black, and Latinx adults (18-25 years) included demographic variables, COVID-19-health risks, and standardized measures of depression, anxiety, coronavirus-related victimization distress and perceptions of coronavirus-related racial bias across a range of contexts. Results: Employment, financial and prescription insecurity, COVID-19-health risks, coronavirus-victimization distress and coronavirus racial bias beliefs were positively correlated with depression and anxiety. Scores on the Coronavirus Racial Bias Scale were significantly higher among Asian and Black respondents. Structural equation modeling controlling for race/ethnicity and demographic variables indicated coronavirus racial bias mediated the effect of coronavirus victimization distress on both mental health indices. Conclusion: Results suggest the COVID-19 pandemic has created new pathways to mental health disparities among young adults of color by reversing formerly protective factors such as employment, and by exacerbating structural and societal inequities linked to race. Findings highlight the necessity of creating mental health services tailored to the specific needs of racial minorities during the current and future health crises.