We analyze whether teachers discriminate against ethnic minority students with regard to grading. Using comprehensive data on students in German primary and secondary schools, we compare students' scores on standardized, anonymously graded achievement tests with non-anonymous teacher ratings within a difference-in-differences framework. Although minority students tend to score lower on the standardized test than majority students, this achievement gap is significantly reduced when graded by the teacher. This finding cannot be fully explained by differences in socioeconomic background, language-related differences in standardized test performance, or the sorting of students into educational contexts with different grading standards. Overall, our findings suggest that teachers have a positive evaluation bias toward ethnic minority students.