Research Findings: The present study investigated the role of ethnic similarity in the peer preferences and play quality of Latino and Chinese children enrolled in Head Start classrooms and the relationship between peer acceptance and social adjustment in these groups. Participants were 244 children (M = 4.6 years old) from Head Start preschools located in the greater Los Angeles area. Results showed that both Chinese and Latino children played more with same-ethnic than cross-ethnic peers, but only Latino children showed same-ethnic preferences in friendship nominations. Play dyads of the same ethnic group engaged in more complex play than those of different ethnic groups. Practice or Policy: Findings suggest that preferences for same-ethnic peers are starting to emerge in preschool classrooms. In addition, prosocial behaviors may be important for all children, regardless of ethnicity, to gain peer acceptance. Implications for practice are addressed.