We examine the role of hopeful thinking in enhancing life satisfaction among a minority group facing pervasive group-based discrimination: country migrant workers' children in China. Positive psychology reasoning suggests that hopeful thinking can attenuate the negative impact of perceived discrimination on life satisfaction. This moderation model is compared to a mediation model, which predicts that reduced hopeful thinking explains the negative impact of perceived discrimination on life satisfaction. Study 1 showed that hopeful thinking did not moderate the relationship between discrimination and life satisfaction. Rather, the negative impact of discrimination on life satisfaction was mediated through diminished hopeful thinking. Study 2 manipulated perceived discrimination and replicated Study 1 findings. The results reveal that hopeful thinking can indeed have positive consequences, but that hopeful thinking is also constrained by perceiving discrimination. This suggests that there are limits to the extent to which hopeful thinking can be developed when facing group-based discrimination.