L. T. Hobhouse (1864–1929) is most familiar today as a leading theorist of British new liberalism. This article recovers and examines his overlooked commentary on the concept and rhetoric of race, which constituted part of his better-known project of advancing an authoritative account of liberal doctrine. His writings during and after the South African War, I argue, represent a prominent effort to cast liberalism as compatible with both imperial rule and what he called ‘the idea of racial equality’. A properly liberal empire, he asserted, would dissolve the colour line. This article traces the arguments Hobhouse advanced to make this claim, and explores his motivations for doing so. I contend that Hobhouse drew on the idiom of race as a form of exclusionary rhetoric, to delegitimise rival accounts of liberal empire and to cast his own as properly cosmopolitan. This recovery, I suggest, offers payoffs for our understanding of both Hobhouse's political thought and, more broadly, the uses of ‘race’ in twentieth-century liberalism.