Objective: This study examines local identity and mental health at one of the most ethnically diverse universities in the United States to move beyond the dichotomy between international and domestic students. Participants: Undergraduate students (N = 1,098) attending a university in Hawai'i completed anonymous surveys during class. Results: Self-identified local students who were born and/or raised in Hawai'i had lower levels of depressive symptoms than non-local students, over and above their nativity status, gender, age, race/ethnicity, multiracial status, and socioeconomic background. Sobel tests further confirmed significant mediators, which suggested that locals were less psychologically distressed than non-locals because of their stronger familiarity with the "aloha spirit," rooted in Native Hawaiian culture, and their lower risk of discrimination. Conclusions: These new findings can inform mental health services and interventions to better target non-local (international and out-of-state domestic) students by considering the stress of discrimination and the protective role of cultural values.