This article examines the symbolic order of the relationships between various social groups in disadvantaged neighborhoods and shows that ethnicity is the main reference point of derogatory designations or ‘negative classifications’. Using two districts in German cities as examples, the semantic patterns of mutual negative classifications among autochthonous individuals and their Turkish neighbors are reconstructed. Upwardly mobile individuals of Turkish origin are the most frequent targets of stigmatization. This fact is explained by the existence of a deep symbolic dimension of social inequality that conceives of ethnicity in terms of kinship relations. The socially inclusive or exclusive effects of negative interethnic classifications and the related classification struggles depend on three factors: the internal, i.e. gradual or categorical logic of the classification patterns; the form and process of conflict resolution; and the social contexts in which negative classifications are used. While the disintegrating effects of negative classifications are curbed by institutionalized norms in local politics and economic life, there only exist informal performative norms of interaction in the life‐world, and here these classifications can more easily lead to social exclusion and ethnic separation.