ObjectiveHealth disparities may be driven by hospital‐level factors. We assessed whether racial and ethnic composition of populations hospitals serve explain or modify disparities in hospital outcomes of children with systemic lupus erythematosus (SLE).MethodsIn this retrospective cohort study of patients 5‐26 years old with SLE at 47 children's hospitals in the Pediatric Health Information System (2006–2021), race and ethnicity were assessed at the patient‐level and hospital‐level (proportion of total admissions comprised by Black or Hispanic patients, respectively). Outcomes included intensive care unit (ICU) admission or adverse renal outcome (end‐stage renal disease, dialysis or transplant) during follow‐up. We estimated racial‐ethnic disparities, adjusted or stratified by hospital racial or ethnic composition.ResultsOf 8125 patients with SLE, 2293 (28%) required ICU admission and 698 (9%) had an adverse renal outcome. Black/non‐Hispanic White disparities in ICU admission were observed only at hospitals serving higher proportions of Black patients (OR 1.29, 95% CI [1.04‐1.59] vs. 1.07, [0.83‐1.38]). Larger Black/non‐Hispanic White disparities in adverse renal outcomes were observed at hospitals with higher Black racial composition (OR 2.0, [1.4‐2.8] vs. 1.7, [1.1‐2.4]). Conversely, Hispanic vs. non‐Hispanic disparities in renal outcomes persisted after adjustment for hospital‐reported Hispanic ethnic composition but were observed only at hospitals with lower proportions of Hispanic patients.ConclusionWorse Black/White disparities in SLE outcomes are observed at children's hospitals serving more Black children, whereas distinct patterns are observed for Hispanic/non‐Hispanic disparities. Reporting of hospital characteristics related to populations served is needed to identify modifiable drivers of hospital‐level variation.