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School-aged children with an ethnic minority background are relatively often involved in bullying and victimization, but the role of ethnic composition of schools in this context remains unclear. This study examined the relation between ethnic minority background, ethnic school composition, and bullying behaviour around primary school entry in the Netherlands. The study was based on a 2008/2009 school survey in Rotterdam, a Dutch city where about 50 % of children have a non-Dutch background. For 8523 children, teacher reports of bullying behaviour at age 5–6 years were available. Children with a non-Dutch background had higher odds of being a victim (adjusted OR 1.41, 95 % CI 1.11, 1.80), bully (OR 1.38, 95 % CI 1.20, 1.58) or bully-victim (OR 1.38, 95 % CI 1.19, 1.62) than children of Dutch national origin. Ethnic diversity in schools increased children’s risk of bullying behaviour (e.g. ORvictim per 0.1 increase in 0–1 diversity range = 1.06, 95 % CI 1.00, 1.13), with children of both Dutch and non-Dutch national origin relatively more often involved in bullying in ethnically diverse schools. The proportion of same-ethnic peers in school reduced the risk of bullying among children of Dutch national origin (e.g. ORvictim per 10 % more same-ethnic children = 0.90, 95 % CI 0.83, 0.98), but not among non-Dutch children. In conclusion, ethnic minority background and ethnic diversity within schools are risk factors for bullying among 5–6 year olds. Plausibly, reductions in absolute numbers of bullying events may be obtained with tailor-made interventions in ethnically diverse schools. Such interventions should preferably be offered early in the school curriculum.