<p>Reentry optimism, reflecting an individual’s motivation and perceived ability to address reentry challenges, may be an important determinant of successful reentry. The experience of interpersonal racial discrimination (IRD), however, may undermine reentry optimism by eroding trust in others. We investigated whether IRD is related to reentry optimism among a sample of persons of color at a local correctional facility located in the Southeast. Additionally, we examined if this relationship is mediated by hostile world beliefs and if the relationship is moderated by neighborhood environment. Our results indicate that IRD is negatively related to reentry optimism. While hostile world beliefs are negatively associated with reentry optimism, we did not find evidence that they mediate the relationship between IRD and reentry optimism. Finally, we found that IRD is more strongly related to reentry optimism among respondents that lived in neighborhoods with high perceived informal social control. The relationship between IRD and reentry optimism highlights how racial stratification and inequality may engender racial inequities in reentry, and points to the need for trauma informed care that is informed by the lived experiences of racism and the psychological harm it causes.</p>