This paper examines the implications of racial diversity for the self-perceived communication effectiveness of nursing care teams. An RN leads the nursing care team (NCT) and delivers care in collaboration with two or more nonlicensed caregivers. Overlap is intentionally designed into the roles of NCT members and the range of duties the team performs is generally expanded to include functions previously performed by personnel from centralized departments. NCTs are highly reliant on mutual respect and effective communication among team members. Team conflict and miscommunication can be exacerbated by the strong correlation between role on the nursing care team (NCT) and race. Verbatim transcripts of fourteen focus groups from two study hospitals were used to develop a grounded theory of the role that race plays in the self-perceived communication effectiveness of nursing care teams. Two themes that emerged from the focus group discussions constitute the overarching framework within which racially diverse team members evaluate team communication effectiveness: different perspectives and alternative realities. Three additional themes, social isolation, selective perception and stereotypes, that serve as reinforcing factors were also identified, i.e., these factors deepen the conflict and dissatisfaction with team communication that occurs as a natural consequence of the overarching framework of different perspectives and alternative realities. Leadership emerged as a powerful mitigating factor in the model of how race influences the self-perceived communication effectiveness of nursing care teams. Leaders who can transcend racial identity as evidenced by the ability to validate alternative realities and appreciate different perspectives appear to moderate the potential negative effects of racial diversity on team communication processes and strengthen the positive aspects of diversity.