Racism and discrimination are fundamental determinants of health inequities, with children and young people particularly vulnerable. Reports of racism and discrimination rose sharply in 2020 along with the global coronavirus (COVID-19) pandemic. We examined racism, discrimination (e.g. direct, vicarious, heightened vigilance, and worries about experiencing racial discrimination), COVID-19 pandemic related stressors (e.g. access to support services, changes to personal relationships, and financial hardship) and their associations with mental health problems (e.g. worry, lack of concentration, and irritability) using a series of linear regression models in young people during the Australian national COVID-19 lockdowns in 2020. Data was collected using the Racism During COVID-19 survey, a community-based, cross-sectional online survey. 363 young people aged 16-24 living in Victoria, Australia were included in our analysis, 45.4% self-identified as being from a multicultural background and 3.7% as Aboriginal and/or Torres Strait Islander. 73.7% reported direct discrimination, 88.9% reported vicarious discrimination, 84.3% reported heightened vigilance and, 62.8% reported worries about experiencing racial discrimination. Half (51.3%) the participants experienced one or two COVID-19 related stressors and one third (34.2%) experienced three or more. Almost all (91.9%) reported high levels for two or more negative mental health problems. Experiences of direct discrimination, vicarious racism, heightened vigilance, worries about experiencing racial discrimination, and multiple COVID-19 related stressors (3+) were each associated with negative mental health problems, after adjusting for ethnicity, age and gender and socio-economic position. Addressing racism and discrimination is critical to addressing social determinants of health for young people.