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Growing diversity and evidence that diverse friendships enhance psychosocial success highlight the importance of understanding adolescents' ethnic peer preferences. Using social identity and social contact frameworks, the ethnic preferences of 169 Asian American adolescents (60% female) were examined in relation to ethnic identity, perceived discrimination, and language proficiency. Adolescents with same‐ and mixed‐ethnic friends reported significantly greater ethnic centrality than those with mostly different‐ethnic friends. Adolescents with same‐ethnic friends reported significantly higher perceived discrimination and lower English proficiency than those with mixed‐ and different‐ethnic friends. Open‐ended responses were linked to quantitative data and provided further insight into specific influences on peer preferences (e.g., shared traditions, homophily). Results speak to the importance of cultural experiences in structuring the friendships and everyday lives of adolescents.