Bicultural identity orientations have rarely been examined in relation to both perceived discrimination and psychological distress. Furthermore, these constructs have usually been studied in isolation, but their intersection is essential for understanding intercultural relations in multicultural societies. Using cross-sectional data from 1,143 Canadian undergraduate students from immigrant families, this study explored the relationship between perceived discrimination and psychological distress, and how bicultural identity orientations might mediate this relationship. The structural equation modeling results indicated that perceived discrimination was associated with higher levels of psychological distress and hybrid, monocultural, alternating, and conflicted orientations, but lower levels of complementary orientation. Alternating and conflicted orientations were related to higher psychological distress, whereas the other orientations were not. Alternating and conflicted orientations mediated the relationship between perceived discrimination and psychological distress, whereas the other orientations did not. The findings are discussed in light of theories on identity integration, rejection–identification, and acculturation.