In a sample of Italian adolescents (N = 754) and their parents (N = 469), we examined the levels of essentialist beliefs about nationality, the extent to which adolescents’ beliefs were shaped by parental beliefs and classroom ethnic diversity, and the implications of essentialist beliefs for attitudes and behaviors toward national outgroups as well as for intergenerational transmission of prejudice. Results of path analyses showed that adolescents who had parents higher in essentialism and who attended less diverse classrooms expressed higher levels of essentialism. Adolescents and parents with higher levels of essentialism expressed higher levels of anti-immigrant prejudice and fewer friendships with immigrants. In addition, parent-adolescent concordance in essentialism partly explained intergenerational similarity in prejudice. These findings offer preliminary support for working with youth’s essentialist beliefs as a means to counteract the development of prejudice.