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Since Putnam introduced his constrict thesis in 2007, many researchers have established that ethnic diversity lowers perceptions of social cohesion, at least in the short term. The connection between ethnic diversity and social behavior, however, is less certain. In this paper we draw on social distance and social identity theories to empirically test if ethnic diversity encourages behaviors linked to social withdrawal. Using data from a longitudinal panel study of urban communities in Australia, we examine the influence of social distance on neighborhood ties, neighborly exchange, and civic engagement and assess if an individual’s social identity (ethnic or civic) strengthens or weakens these relationships. We find individuals that endorse an ethnic identity are more likely to engage in social withdrawal behaviors. Withdrawal is also more likely in neighborhoods where individuals distort the presence of minorities.