Past research has found that stressful events such as racial discrimination can spur social development in racially marginalized youth. Critical consciousness has been identified as one such developmental task. Yet, there is still much to learn regarding the role of racial discrimination in developing critical consciousness, particularly as it relates to the mechanism linking racial discrimination to critical consciousness. We examine whether stress, in the form of psychological distress, may explain the link between online racial discrimination and critical consciousness. Online racial discrimination is a type of racial discrimination and is a growing risk to safe internet use for ethnically and racially marginalized youth. The current study employed a moderated mediation model to examine the associations between online racial discrimination and critical consciousness (critical agency and critical action). Data were from 356 Black and Latino adolescents, 50% each (Mage = 15.97, SD = 1.61), and 78.92% female. The model included psychological distress as a mediator between online racial discrimination and critical consciousness and self-esteem as a moderator of psychological distress and two critical consciousness dimensions. Psychological distress was a successful mediator, and self-esteem moderated the link between psychological distress and critical consciousness dimensions. The present findings suggest that psychological distress may be one mechanism through which online racial discrimination may impact the development of critical consciousness in Black and Latino adolescents.