We review theoretical and empirical evidence that helps us understand how a developmental competency, namely ethnic-racial identity (ERI), can promote positive youth development and, in doing so, can help address ethnic-racial disparities resulting from systemic racism. We review this work from a risk and resilience perspective, elucidating different mechanisms of promotion and protection in the context of ethnoracially based risk. Understanding the conditions under which (and the mechanisms by which) certain ERI domains promote and inhibit adjustment can help us support ERI development among youth of color. Ultimately, we argue that ERI development among youth of color is one important avenue toward reducing ethnic-racial disparities in key developmental outcomes and, thus, disrupting cycles of inequity caused and perpetuated by systemic racism. (c) 2021 S. Karger AG, Basel