This paper identifies the salient features in the 1985–1990 and 1995–2000 destination choices of newly arrived immigrants, and performs multivariate explanation of these choices, based on an application of a multinomial logit model to the state‐specific immigration data of the 1990 and 2000 censuses. The salient features are that: (1) the destination choice pattern of the newly arrived immigrants became more dispersed from the late 1980s to the late 1990s; (2) the change was pervasive in the sense that it was true for all combinations of five broad ethnic groups and four levels of educational attainment; (3) the change was much greater for Hispanics and Blacks than for Asians and Whites; (4) the lower the level of education, the greater the increase in dispersion; and (5) the Hispanics with the lowest education experienced the greatest increase in dispersion. Our multivariate analysis reveals that: (1) while the attraction of co‐ethnic communities as destinations remained strong for both periods, it became much less intense in the late 1990s, especially for Hispanics and Blacks; (2) the newly arrived immigrants were subject to the strong pull of higher income level in both periods; (3) the pull of employment growth became stronger and more industry‐specific from the late 1980s to the late 1990s; and (4) the pull of
serviceemployment growth, especially for the least‐educated Hispanic immigrants, became much stronger in the later period. In the context of the progressive entrenchment of neoliberalism and the major changes in immigration policies, our empirical findings suggest that the ethnically selective dispersal of immigrants in the late 1990s is probably the beginning of a new trend. Copyright © 2007 John Wiley & Sons, Ltd.