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A number of scholars have noted a negative relationship between ethnic diversity and social capital or social trust, especially in the US. Evidence from other countries has been more mixed and sometimes contradictory. In this paper we provide the first Anglo-American comparative analysis of the relationship between neighbourhood diversity and social capital, and show how this relationship varies across ethnic categories. We apply multilevel structural equation models to individual level data from the 2000 Citizen Benchmark Survey for the US and the 2005 Citizenship Survey for Great Britain. The findings suggest that while for attitudinal social capital among Whites the negative underlying relationship with diversity is apparent in both countries, the effect is much weaker or reversed for minority groups. For structural social capital the negative relationship is apparent for minorities but not Whites, but this is mainly attributable to other neighbourhood characteristics. [ABSTRACT FROM AUTHOR]