<p>Bullying is a harmful relationship problem that has negative impacts on youth mental health. Relative to contexts with high rates of bullying, youth who are victimized in contexts with <i>lower</i> overall rates of bullying experience worse mental health impacts – this effect is known as the healthy context paradox. Research has yet to examine whether the healthy context paradox also exists for identity-based bullying. This form of bullying, also known as stigma-based and bias-based bullying, occurs when youth are targeted because of an aspect of their social identity (e.g., race, religion, sexual orientation, gender identity, disability, or body weight). The current study used a nationally representative sample of Canadian youth in grades 6-10 (n = 23,764 from 217 schools) from the Health Behavior in School-aged Children study to examine whether there is a healthy context paradox for identity-based bullying specifically. Results from multivariable regression analyses indicated that, in general, both individual-level and school-level identity-based bullying were associated with poorer youth mental health. However, there was little to no evidence of a healthy context paradox effect, as the negative effect of bullying was greatest in low-prevalence schools in only 1 of 12 associations between individual-level victimization and mental health examined. It is possible that identity-based bullying may be less sensitive to such contextual effects, or that other levels of youths’ social ecologies (e.g., neighbourhoods) matter more when examining variation in identity-based bullying. </p>