Workforce diversity has been described as a double-edged sword; it has the potential for positive and negative outcomes. To better understand why and how diversity leads to positive outcomes, we examined the relationship between employee perceptions of diversity climate perceptions and intent to turnover. We explored the role of four psychological outcome variables (organizational commitment, climate for innovation, psychological empowerment, and identity freedom) as possible mediators of this relationship. Racial and gender subgroup differences were also examined. Survey data were collected from 1,731 public employees. Findings suggest that when employees perceive equal access to opportunities and fair treatment, intent to turn over decreases. Furthermore, these relationships are significantly mediated by psychological outcomes. Implications for diversity management and training are discussed.