The Department of Education says it deplores racism but can't stop pupils joining online racist groups.
A Facebook group entitled 'Keep The Isle Of Man White & Free From Foreigners' has been set up by Delano Bourdiec of Douglas, and features a number of racist comments.
It describes itself as the 'Manx Ku Klux Klan' and some of its 95 members list themselves as attending Island schools, including Ballakermeen, Castle Rushen and QE2 high schools.
It's not clear whether any students will face any sort of action from schools, or whether the schools are investigating.
Jason Roberts reports (text, below, from attached audio file):
In a statement, the Department of Education says it finds the sentiment behind the site deplorable and cannot condone racist comments or viewpoints.
It adds that while schools do their best to educate students about tolerance, they obviously have no control over which online groups students join in their free time.
The statement says there is no clear indication about how many of the racist slurs have been written by students in the Island's schools.
And the department says many of the comments condemn the sentiment behind the group.
Researching your Manx family history can be a very interesting and rewarding hobby. Trace your roots in the Isle of Man with our helpful of guide.
