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De facto school segregation, stemming from structural racism, has myriad consequences for children's development. Extant research documents the implications of segregated schools for children's academic resources and opportunities, but there is less attention on the social processes that unfold as a result of school segregation, particularly in early and middle childhood. Social processes--including ethnic-racial socialization, stereotyping and prejudice, and intergroup contact--are important mechanisms wherein school segregation affects academic and social development, thereby upholding a recursive cycle of structural racism. We synthesize cross-disciplinary theoretical and empirical research to propose a conceptual framework for how school segregation relates to social processes that shape early and middle childhood development. We conclude with reflections and future directions including prioritizing the social benefits and costs of desegregation for minoritized children, expanding research within an intersectional framework, accounting for structural inequities and injustice in child development research more broadly, and implications for education and learning.