Previous research has linked sociodemographic neighborhood characteristics with labor market outcomes for youth, but this research has provided little evidence of how these linkages work. In this article I examine practices of urban institutions and the career development of inner‐city minority youth in the United States. A comparative study of two Latino inner‐city neighborhoods in San Antonio, Texas, analyzes in‐depth interviews with seventeen administrative officers of community‐based institutions. The results reveal that institutional practices and administrators’ interpretations of the cultural attributes of youth and neighborhoods differ between the two case study areas. In one neighborhood, cultural preconceptions among administrators, accompanied by the spatial and social isolation of youth, channel some youth towards secondary careers. Institutions in the other neighborhood focus on social and spatial integration strategies and thereby facilitate acculturation. The article explores institutional practices of cultural marginalization.