In contrast to the view, expressed widely in public and in academic discourses, that ethnic categories are no longer significant in explaining Israeli social processes and that ethnic relations have become less hierarchical, this study demonstrates the continuing importance of ethnicity and hierarchical relations in Israeli society. Their importance is reflected in the social processes undergone by middle-class Mizrachi adolescents. Mizrachi families endow their adolescents with family capital—that is, social and cultural patterns—similar to that of middle-class Ashkenazi families. However, because these social and cultural patterns are identified as Ashkenazi, public discourses and practices signify for Mizrachi adolescents their ethnic identity and thus restore the blurred ethnic boundary. This signification is done through mechanisms of 'hybridization' and 'purification', as discussed in the article. These cultural mechanisms maintain the hierarchical relations between Mizrachi and Ashkenazi Jews within Israel's middle class.