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The term “diversity,” although widely used, can mean different things. Diversity can refer to heterogeneity, i.e., the distribution of people across groups, or to the representation of specific minority groups. We use a conjoint experiment with a race-balanced, national sample to uncover which properties, heterogeneity or minority representation, Americans use to evaluate the extent of racial diversity a neighborhood and whether this assessment varies by participants’ race. We show that perceived diversity is strongly associated with heterogeneity. This association is stronger for Whites than for Blacks, Latinos, or Asians. In addition, Blacks, Latinos, and Asians view neighborhoods where their own group is largest as more diverse. Whites vary in their tendency to associate diversity with representation, and Whites who report conservative stances on diversity-related policy issues view predominately White neighborhoods as more diverse than predominately Black neighborhoods. People can agree that diversity is desirable while disagreeing on what makes a community diverse.