Institutional racism, also known as systemic racism, refers to policies and practices that exist throughout a whole society or organization that result in and support a continued unfair advantage to some people and unfair or harmful treatment to others based on their race or ethnicity. It is distinguished from the explicit attitudes or racial bias of individuals by the existence of systematic policies or laws and practices that provide differential access to goods, services, and opportunities of society by race. Institutional racism results in data showing racial gaps across every system, affecting where people live, the quality of education they receive, their income, types of food they have access to, their exposure to pollutants, whether they have access to clean air, clean water or adequate medical treatment, and the types of interactions they have with the criminal justice system.

The term institutional racism was first coined in 1967 by Stokely Carmichael and Charles V. Hamilton in Black Power: The Politics of Liberation. Institutional racism was defined by Sir William Macpherson in the UKs Lawrence report (1999) as "The collective failure of an organization to provide an appropriate and professional service to people because of their colour, culture, or ethnic origin. It can be seen or detected in processes, attitudes and behaviour that amount to discrimination through prejudice, ignorance, thoughtlessness, and racist stereotyping which disadvantage minority ethnic people".

Institutional racism is often the most difficult to recognize and counter, particularly when it is perpetrated by institutions and governments who do not view themselves as racist. When present in a range of social contexts, this form of racism reinforces the disadvantage already experienced by some members of the community. For example, racism experienced by students at school may result in early school dropout and lower educational outcomes. Together with discrimination in employment, this may lead to fewer employment opportunities and higher levels of unemployment for these students when they leave school. In turn, lower income levels combined with discrimination in the provision of goods and services restrict access to housing, health care, and life opportunities generally. In this way, institutional racism may be particularly damaging for minority groups.