Purpose: As public sector managers implement the policy of employing people that broadly reflects the social make up of a local society, there is a need to ensure that employees have a positive perception of ethnic diversity. Perceived environment of ethnic diversity (PEED) is conceptualised as employees’ view of how they are treated at work irrespective of where they come from. The purpose of this paper is to investigate the relationship between PEED and organisational identification (OID). Design/methodology/approach: Data were collected by means of a survey of 908 employees from four public sector organisations in a state in Nigeria. Regression analysis was used to test the hypotheses. Findings: Findings showed that OID may be fostered among multi-ethnic employees through the following framework: first, PEED had a direct relationship with OID and support was found, which was explained by the mediating role of co-worker social support (CWSS). Second, the effect of CWSS mediation was moderated by employees’ ethnic self-identification (ESI) such that those with strong ESI experienced lower OID. Practical implications: As employee compositions in organisations increase in diversity, CWSS is presented in this study as a veritable measure for managers to foster OID. Originality/value: This study is novel as it is one of the first to examine the mechanisms for linking PEED to OID through mediating effect of CWSS at different levels of ESI. Other contributions are discussed in detail in the study.