The ethnic and racial structuring of U.S. neighborhoods may have important implications for developmental competencies during adolescence, including the development of heritage and mainstream cultural orientations. In particular, living in highly concentrated Latino neighborhoods during early adolescence--which channels adolescents into related school environments--may promote retention of the ethnic or heritage culture, but it also may constrain adaptation to the mainstream U.S. culture. We tested these hypotheses longitudinally in a sample of 246 Mexican origin adolescents (50.8% girls) and their parents. Data were collected 4 times over 8 years, with adolescents averaging 12.5 (SD = 0.58) to 19.6 (SD =0.66) years of age across the period of the study. Latino ethnic concentration in early adolescents' neighborhoods promoted the retention of Mexican cultural orientations; Latino ethnic concentration in middle schools undermined the development of mainstream U.S cultural orientations. Findings are discussed in terms of integrating cultural-developmental theory with mainstream neighborhood theory to improve understandings of neighborhood and school ethnic concentration effects on adolescent development.