The key role that generalized trust plays in social capital formation is well documented, but its determinants are not well understood. Many studies suggest that racially and ethnically diverse areas have lower generalized trust than more homogeneous areas, but evidence regarding the impact of the spatial arrangement of racial and ethnic groups is not conclusive. Further, while scholars theorize that discrimination may play a role in racial trust gaps, no study has empirically supported this linkage. We examine the impact of racial residential segregation and perceived discrimination on generalized trust in two highly diverse Texas counties using data from the 2014 Kinder Houston Area Survey. Results indicate that perceived racial discrimination negatively impacts trust and may mediate the black-white trust gap, whereas racial segregation is positively associated with trust. Additionally, having an interracial friendship, one form of bridging ties, moderates the segregation-trust relationship such that, up to a certain level of segregation, having an interracial friendship increases one’s likelihood of trusting others. Together, these results provide insight into processes that generate or sustain the general trust that makes social capital formation possible and point to the continuing importance of race in shaping experiences and outcomes in modern American society.