BACKGROUND: The current literature describing the largely damaging effect of racial discrimination on child health is weakened by several confounding factors. We aimed to: 1) describe the relation between racial discrimination and child health and 2) evaluate the potential mediating role of mental health relating racial discrimination to child health, using methods that mitigate confounding. METHODS: Using the 2011-2012 National Survey of Children's Health (N = 95,677), we performed: 1) propensity score analysis, matching and comparing discrimination-exposed to non-exposed children and 2) structural equation modeling, examining mental health as a mediator of the pathway between discrimination and child health. RESULTS: In the first approach, the proportion of children with excellent health was 5.4% (95% Confidence Interval (CI), 3.6,7.2%) lower with exposure to racial discrimination. Among minority children, those with low income had the greatest decrements in general health associated with racial discrimination. Among white children, those with high income had the greatest decrements. In the structural equation model, minority children had higher odds of experiencing racial discrimination (Odds ratios (ORs) ≥ 5.47, [95% CIs, 4.92,10.6]); meanwhile, children who experienced discrimination were more likely to have anxiety and depression (ORs ≥ 3.58, [95% CIs, 2.87,4.58]), which were linked to lower odds of excellent health (ORs ≤ 0.44, [95% CIs, 0.41.52]). CONCLUSION: The negative health association of racial discrimination may be mediated by mental health and vary by racial, ethnic, or socioeconomic group. This work may stimulate the formation of targeted interventions to address these disparities.