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This study works to uncover the way undergraduate teacher education students develop cultural competence, and how this promotes social justice thinking. Through interpretivist methods, online case-study discussions were analyzed to discover elements of this process. The untheorized nature of cultural competency made it difficult to articulate distinct capacities of the participants. Racial identity theory was used to clarify participants’ capacity for movement toward greater cultural competency. Participants who attend more fully to the experiential context of the case studies represented a more inclusive racial identity, which allowed for greater cultural competency. Conversely, many participants ignored controversial issues presented in the cases, maintaining a reactive, defensive stance suggestive of a less developed racial identity, which could suppress deeper cultural competency.