Underrepresented racially and ethnically minoritized (URM) students contend with individual-level race-based stressors in college, like racialized discrimination and microaggressions. In this study, we consider whether URM students' perceptions of racial inequity on campus—a context-level race-based stressor—trigger adverse psychological and physical stress responses that, in turn, undermine academic achievement. Using a sample of 781 science, technology, engineering and math (STEM) students, we found in a longitudinal study that URM students report perceiving more inequality on campus compared with White and Asian students. Greater perceived inequality was, in turn, associated with increased psychological and physical stress responses, which, in some cases, predicted lower grades. Promoting more equitable college environments, therefore, may help attenuate inequalities in stress responses, ultimately, enhancing academic achievement. Please refer to the Supplementary Material section to find this article's Community and Social Impact Statement.