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Standard sociological theory associates race with biology and heredity, while linking ethnicity to culture and malleability. This paper challenges such notion by analyzing a historical case, namely the Dillingham Commission Report (1911). Rapid increase in immigration in the late 19th century posed a challenge of classifying people: immigrants from Eastern and Southern Europe, as well as from Latin America and Asia, were neither black nor white and thus called for a new way of thinking about race. The Dillingham Commission Report met this challenge by establishing categories of “races or peoples,” which became the basis of the national quota restrictions in the 1920s. In the process, the Commission extended the meaning of the term, including language, religion, nationality, and history under the rubric of “race”. The concept of ethnicity emerged out of this extension while retaining, not negating, many of the core assumptions of race. By closely following the origin story of race and ethnicity, this paper argues that the relationship between the two concepts is much more direct and close than previously conceived. The conclusion will discuss the implication of this finding to the contemporary issues around race and immigration in the U.S.