Past studies have found that multicultural approaches to diversity can reduce prejudice and stimulate positive intergroup relations. The current research explored a possible negative side effect of multiculturalism: whether organizational diversity structures geared toward multiculturalism can conceal racial discrimination and delegitimize racial discrimination claims. Three studies found that, even when objective information was indicative of discrimination, both Whites and racial minorities perceived organizations which had diversity policies emphasizing multiculturalism as more fair toward minorities. This perception of (false) fairness led individuals to perceive less racial discrimination and to view claims of racial discrimination against that organization as less legitimate. Furthermore, we found that organizational multiculturalism and externally granted diversity awards both produced a (false) fairness effect. The results suggest an irony of multicultural diversity structures: They can create a false fairness effect that conceals and delegitimizes discrimination.