Sustained migration of Hispanics and Anglos into Texas’s historical “German belt” has contributed to a significant decline in the proportion of Central Texans claiming German ancestry. Under these circumstances, ethnic festivals are playing an increasingly important role in maintaining the German-American identity of many of the region’s people and places. Organizers and participants frequently tout the events’ inclusiveness, claiming that anyone can temporarily cross ethnic boundaries to become “German for a day” within the festival context. However, participant observation and surveys of festival participants in three historically German-American communities (Brenham, Fredericksburg, and New Braunfels) suggest that ethnic-themed events mirror processes of racialization that have persisted in the region for more than 150 years. In this paper, I argue that, in helping to construct “German” identities for the region’s people and places, German-themed events in Central Texas are implicitly involved in the construction of “non-German” and, by extension “non-white,” ethnic identities. Further, event participation patterns reflect a long-standing black-white racial dichotomy in the region. Within this ethnoracial hierarchy, Hispanics have long occupied a liminal status that is reflected by their involvement in the production and consumption of German-themed events. I contend that Hispanics’ participation in German heritage festivals reflects not only a historical process of “whitening” their racial status but their increasing presence and power within the region.