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As gentrification has become widespread across cities throughout the US over the last two decades, the growth of new immigrants and shifting patterns of immigrant settlement and profiles have reshaped metropolitan contexts. Few studies have examined the extent to which the influx of immigrants to cities and their neighborhoods affects how gentrification unfolds in cities. Analysis based on US Census and American Community Survey data from 1990 to 2014 shows a negative relationship during the 1990s but a positive relationship after 2000 between immigration and the prevalence of gentrification across cities. At the neighborhood-level, the results reflect two dynamics of neighborhood change occurring. First, we find limited preferences for diversity governed by a hierarchical process in the spread of gentrification such that the influx of immigrants in black neighborhoods increases the odds of gentrifying but decreases the odds in other neighborhoods. Second, we find evidence of housing competition dynamics such that immigrant influx to neighborhoods offsets gentrification pressures onto other neighborhoods. This process is racially patterned during the 1990s but not 2000s. Together, these dynamics explain the increased prevalence of gentrification in predominantly black neighborhoods during the 2000s. The findings suggest that new patterns of residential stratification underlie urban change in the twenty-first century while old mechanisms persist.