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Florida's (2002) creative class theory has ignited controversy on the role of diversity in promoting social differentiation across US cities and metropolitan areas. This paper extends this theory to the neighborhood level and empirically examines the role that population diversity plays in the social and economic growth of Chicago neighborhoods by attracting new creative and talented residents. It draws on Fischer's (1975) subcultural theory of urbanism and recent scholarship on immigration to explain the social processes through which the diversity can generate new creative energies. Moreover, this paper adds to Florida's controversial conceptualization of diversity a new, more rigorous definition that integrates multi-ethnic, linguistic, immigrant, and regional components. Consistent with predictions, the findings show that diversity attracts increasing concentrations of creative class and highly skilled individuals, even after accounting for spatial spillovers. However, unlike bohemians, scientists or educators, the professionals' group tends to wither away from diverse neighborhoods, indicating the need to significantly reconsider Florida's definition of the creative class. Finally, the results also underscore the importance of accounting for the dynamic social processes in which, by impacting neighborhood growth, diversity potentially undermines itself. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]