To understand the psychological origins and impact of racism, two assumptions are proposed. The first is that racism develops out of internal paranoid schizoid splits. The second relates to the manner in which these splits are organized. The history of racial exploitation provides powerful projection highways that can be used to maintain these internal splits. Reciprocal projective identification between internal and external white part-objects and internal and external black part-objects locates desirable aspects of the self in white objects and undesirable aspects in black objects. Some of the resulting complex defences and identifications are illustrated using case material.