This paper investigates how Toronto’s Portuguese-Azorean community has shaped the city’s multicultural and psychological landscape, focusing particularly on intergenerational experiences of trauma among immigrant youth. Framed within North America’s broader migration dynamics, the study explores the creation and transformation of the ethnic enclave “Little Portugal” as both a space of cultural resilience and chronic urban stress. It introduces the concept of chronic urban trauma to describe the persistent psychosocial impact of displacement, assimilation pressures, and gentrification on young Portuguese-Azorean Canadians. While first-generation immigrants constructed cohesive ethnic infrastructures grounded in work, faith, and language, younger generations face cultural dissonance, linguistic loss, and identity fragmentation that manifest as emotional distress and social alienation. These experiences illustrate how structural urban change can perpetuate transgenerational trauma within immigrant families. By integrating perspectives from urban geography, trauma studies, and migration theory, this theoretical work underscores the need for trauma-informed educational and social policies that promote inclusion, belonging, and mental well-being among immigrant youth. Ultimately, the study positions “Little Portugal” as a microcosm of how multicultural cities negotiate the intersections of ethnicity, urban transformation, and psychological resilience.