Social Identity Theory proposes that a positive in-group social identification fosters students' academic motivation and psychological well-being. The present study, grounded in Social Identity Theory, investigated the roles of racial/ethnicity identity (REI) in the development of school adjustment among Black and Latinx youth as well as the psychological mechanisms underlying these longitudinal associations. We hypothesized that REI would positively predict the development of academic achievement and emotional symptoms. In addition, we hypothesized that the development of school belonging would mediate the predictive effects of REI on the growth of academic achievement and emotional symptoms. Participants were 475 (n = 182 Black, 48.9% female; 293 Latinx, 47.8% female) students in Grades 7–9. Students self-reported their REI, school belonging, and emotional symptoms. Academic achievement was assessed using standardized achievement test scores. The longitudinal mediation models indicated that REI indirectly predicted the development of academic achievement and emotional symptoms through students' sense of school belonging. Specifically, higher REI embedded achievement and lower REI awareness of racism predicted higher school belonging in Grade 7. Higher Grade 7 school belonging in turn predicted faster academic growth in Grade 7 to Grade 9 as well as lower emotional symptoms in Grade 7. In addition, the three dimensions of REI also directly predicted the growth of academic achievement and emotional symptoms in Grades 7–9. The mediated effects were smaller in size than the direct effects. These findings highlight the importance of fostering positive REI and a strong sense of school belonging in promoting school adjustment among racial/ethnic minoritized, academically at-risk youth.