This article reviews the theoretical contributions of psychiatrists to understanding racism. Racism is poorly understood because it is a tool of socio-economic oppression and it serves those in power to obscure its nature. Confounding factors are examined from several perspectives including coercive behaviors characteristic of unequal relationships, ethnocentric blindness, ignorance about socio-economic oppression and the racialization of poverty. The damaging effects of racism on physical and mental health are reviewed, as well as the complicity of medicine and psychiatry in dominant cultural racist practices. Despite this complicity, psychiatry has contributed to psychological theories of the origins of racism. Psychoanalytic perspectives argue that racism is not a problem of certain people, but a problem intrinsic to human character and unconscious dynamics.