The two components of hope (i.e., hope‐agency defined as the ability to envision and believe in one's ability to achieve goals; hope‐pathway defined as belief in one's ability to devise strategies to achieve one's goals) propel adolescents toward well‐being, academic achievement and personal fulfillment. This study compares levels of hope and its components, for different groups of immigrant and ethnic non‐immigrant youths, while adjusting for and measuring the impact of racism, school and family characteristics, and the youth's unique individual attributes. Using a community‐based participatory research approach and a cross‐sectional study design, data were collected from immigrant and non‐immigrant youth (n = 567) between May 2015 and December 2015 at three Israeli public high schools. The study included five groups of youth based on their self‐descriptions: Ethiopian immigrant (n = 48), Russian immigrant (n = 145), Israeli‐born Mizrachi/Sephardi (n = 59), Israeli‐born Ashkenazi (n = 49), or Israeli‐born Unspecified (n = 266). Linear regression models showed that Ethiopian immigrant youth, compared to Russian immigrant youth and all Israeli‐born groups of youth, had significantly lower hope‐agency, hope‐pathway and overall hope. However, an interaction effect between racism and ethnicity indicated that adolescents who perceived racism and self‐identified as Ethiopian had higher hope‐agency, hope‐pathway and overall hope. This effect was not found with Russian immigrant or Israeli‐born youth. Immigrants of color compared to other immigrants and ethnicities have less overall hope; but those who acknowledge racism feel more control over their future (hope‐agency), able to devise strategies to surmount barriers blocking goals (hope‐pathway), and have greater overall hope.