I address the objection that the concept of racism has become overly inflated. Critics of the conceptual inflation of “racism” argue that theories of institutional racism engage in untoward conceptual inflation insofar as they undermine our moral understanding of racial phenomena, hinder our ability to explain the causes of racial inequality, and even undercut struggles for racial justice. I develop an original account of institutional racism and show that it is immune to all three versions of the conceptual inflation challenge.