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Contemporary urbanization in Africa is characterized by the growth of smaller urban centers. What are the prospects for interethnic toleration in small urban areas when compared to larger cities? Given the urban locus of interethnic contact and the potential negative consequences of local ethnic diversity, fostering social cohesion amidst diverse urban populations is a policy priority. Yet we know little about interethnic relations – and political behavior more broadly – in the smaller urban agglomerations of the region. In this pre-registered study, I construct an original sample of 1,568 Ugandans from a single ethnic group and common place of origin. I show, using both a conjoint experiment and observational measures, that rural-to-urban migrants who moved to different sizes of urban locations hold distinct attitudes towards interethnic relations. Compared to smaller urban centers, coethnicity is more important for trust-based interactions in metropolis and secondary city settings. Similarly, prejudice towards non-coethnics is highest in the metropolis and lowest in smaller urban areas. I find support for three mechanisms underpinning this relationship: (1) smaller urban areas engender familiarity between neighbors which allows for the fostering of more tolerant interethnic relations; (2) competition for jobs and housing in large cities is framed by ethnicity, which yields antagonistic social relations; and (3) the circular nature of migration intentions into the largest cities discourages investment in amicable relations with non-coethnics. These findings have implications for our understanding of how the current wave of urbanization in Africa – which is concentrated in smaller urban areas – influences social cohesion in highly diverse contexts.