This paper explores the overt and covert forms of racism in American institutions of higher education and focuses on racism at one graduate school in psychology. Though the nation as a whole decries racism, overt racial acts are on the upswing at institutions of higher education and covert racism exists across the nation. The paper argues that, in the educational community, the most significant racism is covert and involves hostile and insensitive acts, bias in the application of harsh sanctions, bias in attention to students, bias in selection of curriculum materials, unequal amounts of instruction, biased attitudes toward students, lack of diversity in faculty and administration, and denial of racist actions. The central portion of the paper examines a particular graduate school of psychology publicly known for its openness and diversity. This portion cites examples of overt racism. Confronting these incidents brought to the surface existing covert racism in student treatment, hiring patterns, and community denial of racism. A final section explores and suggests solutions to address feelings, biases, and prejudices in the areas of school policies, faculty recruitment and awareness, student sensitivity, and curriculum opportunities. (Contains 14 references.) (JB)