Properly understood and competently managed, culture can be a healing ingredient in a residential environment. Practitioners must be aware of its multiple layers and its inherent diversity in order to optimize its therapeutic benefit. They must understand and be sensitive to the cultural characteristics children and youth bring to treatment: those of their ethnicity, those of their family, and those they bring as individuals. Further, they must be sensitive to factors that may promote the development of unhealthy cultural components and find ways to minimize those effects. At lease two useful, evidence-based programs exist that can provide a framework for culturally-grounded residential practice. These are Positive Peer Culture and Positive Group Interaction. Little research has explored salient aspects of youth culture in residential treatment settings. However, some research indicates that tailoring an intervention to a target population can increase its effectiveness. This evidence resulted in a shift to ethnically-sensitive programs. This article maintains that the goal should be the “cultural grounding” of a program in the actual experiences of those that will receive the service. Issues of “peer contagion” (peer infection) and counter perspectives related to the concept of Positive Peer Culture are discussed. References