The Macpherson report (Macpherson, 1999) began as a specific inquiry into the failure of the (London) Metropolitan Police to successfully apprehend the killers of Stephen Lawrence, a young black man murdered by a gang of white racists in South London in 1993. The report concluded that the police investigation was sabotaged by ‘a combination of professional incompetence, institutional racism, and a failure of leadership by senior officers’ (46.1).1 In order to gain a fuller understanding of the dynamics of police racism, Macpherson, in the second part of his inquiry, held a series of general meetings with representatives of Black and other minority communities in several cities in the United Kingdom on the general problems of policecommunity relations. One of Macpherson’s central aims was to show how the conduct of the police, both in the flawed Lawrence murder investigation and more generally, was influenced by what has come to be called ‘institutional racism’, that is, racial prejudice and discrimination generated by the way institutions function, intentionally or otherwise, rather than by the individual personalities of their members (Lea, 1986). Macpherson attempts to deploy the concept in a more sophisticated way than did the Scarman report of 1981, the result of an earlier major inquiry into the state of relations between the police and ethnic minority communities. The argument of this article will be that Macpherson’s discussion of institutional racism fails to locate with sufficient precision its roots within the structure of operational policing and in the relationship between police and minority communities. The result is that a major opportunity to spell out a policy agenda adequate to the task of eliminating racist policing has been missed.