Transcultural placements occur frequently in foster care, and impact the ethnic identity of ethnic minority foster youth. Studies that investigate how foster youth’s ethnic identity develop over time, and what role ethnic minority as well as ethnic majority influences play, are extremely scarce. Therefore, we conducted a longitudinal qualitative study, in which we explored how transculturally placed foster youth develop their ethnic identity and what fluctuations occur over time. Results show that the ethnic identity of foster youth seems to be influenced by a sense of belonging towards foster parents, birth parents and peers, as well as by the foster youth’s ability to cope with receiving contradictory ethnicity messages. Furthermore, societal movements and discussions about discrimination and racism impact the way foster youth view themselves as being an ethnic minority in majority society. In future, more attention should be paid to how foster youth can be guided by foster parents and foster care workers in safely exploring an ethnic identity of their own, and how a positive bond with both foster parents and birth parents, can further contribute to this process.