Objectives Prior studies have shown significant racial disparities in psychosocial stressors for pregnant women. One physiological mechanism by which prenatal stress is expressed is via the stress-sensitive hormone cortisol, which itself differs by race. In this study, we examine differences in cortisol awakening response (CAR) for African-American and Caucasian pregnant women during late pregnancy, particularly whether racial disparities are evident after accounting for measures of psychosocial stress. Methods During their third trimester of pregnancy (32-40 weeks of gestation), we asked women to self-collect salivary samples at home over 2 days. We then measured salivary cortisol across the day for 30 pregnant women (18 Caucasian; 12 African-American) to examine the CAR by race and by multiple measures of self-reported psychosocial stress, including perceived discrimination. Results Although the women in our sample showed normative cortisol diurnal rhythms (high on waking, peak 30 min post-waking, lowest at bedtime), we found that African-American women had blunted (smaller) awakening responses compared to Caucasian women (p < 0.05). The CAR was significantly larger in Caucasian women compared to African-American women even after accounting for covariates in a multivariate equation. However, when we added measures of psychosocial stress to the multivariate equation, higher levels of stress were significantly associated with a smaller CAR (p < 0.05), and the association between maternal race and CAR was no longer significant. Conclusions Our results add to a growing body of evidence that racial differences in the activity of the hypothalamic-pituitary-adrenal axis are associated with psychosocial stress during pregnancy.