Migratory processes in southern Europe over the last two decades have brought about substantial changes to the ethnic makeup of secondary schools. Classrooms have increased in their complexity in terms of teaching, as there are pupils with different cultural and economic backgrounds and educational needs, but also in the relationships among the peer groups of pupils. What kinds of attitudes and relations can be found among the members of this culturally diverse pupil body? What kinds of views are held by the pupils about each other? The aim of this paper is to shed light on stereotypes and xenophobic attitudes towards immigrant pupils in secondary schools in Spain, principally among peer groups, and on how teachers address this multicultural classroom dynamic and complexity and any possible prejudices towards stereotypes and racist attitudes that surface inside the classroom. Relationships tend to be formed among peer groups of the same ethnicity and there is a marked rejection of pupils from Moroccan origin. Teachers are neither aware of pupils' stereotypes nor of their own. As a consequence, they are not giving sufficient pedagogical responses to resolve arguments or disrespectful situations against immigrant pupils. This in turn is contributing, on the one hand, to racist and xenophobic societies. On the other hand, teachers' low expectations of these immigrant pupils has had an effect on their academic achievements and on dropout rates. The present study is based on 2196 questionnaires administered to pupils at 43 Spanish secondary schools. In-depth interviews with 54 secondary school teachers were also carried out, so as to understand teachers' discourses and pedagogical resources.