Racial and ethnic variables are routinely used in health services research. However, there is a growing debate within nursing and other disciplines about the usefulness of these variables in research. A qualitative study was undertaken (July 2004 – November 2004) to ascertain how researchers conceptualize and operationalize racial and ethnic data. Data were derived from interviews with 33 participants in academic health centers in differing geographic regions. Content analyses extracted manifest and latent meanings to construct categories depicting respondents' understandings of race and ethnicity in research. Race and ethnicity held several meanings but the subtext was often not clear because these terms were not operationalized. Measuring race and ethnicity quantitatively necessitated uniform classifications thus it was often necessary to impose a single racialized identity. Respondents recognized the problems with racial and ethnic variables but the majority still believed these variables were necessary and useful. Several researchers understood that racial and ethnic variables were used in ways that may stigmatize the populations studied. These respondents collected data on variables other than race and ethnicity to ascertain the causes of health differentials. The policy recommendation calls for a shift in thinking about how to use racial and ethnic variables in research.