This study addresses the difficulty in linking ethnic discrimination and integration outcomes of immigrants in empirical research. Many of the existing studies look at the relationship between perceived discrimination and integration, but most are based on cross-sectional data. We argue that perceived discrimination should not be taken as an accurate indicator of actual experiences of discrimination, but rather as a partly subjective interpretation of often ambiguous situations. Reported perceptions may thus not only affect but also reflect integration outcomes. This analysis is one of the few that is based on longitudinal survey data (from the German Socio-Economic Panel) and looks into both the determinants and the consequences of perceived discrimination. Results suggest that PD does in fact reflect both exposure to discrimination and attributional processes. Perceived discrimination is generally and substantially lower in more integrated individuals. More detailed analyses reveal that this link is correlational in nature and to some extent group specific. For groups facing salient ethnic boundaries, integration does not come along with less perceived discrimination. In line with previous studies, our results show further that minorities’ structural integration into the labor market is unrelated to perceived discrimination but reflects, above all, individual resources, including language skills and social ties to majority members. There is some evidence that perceived discrimination reduces levels of identification with the receiving society.