1595, from Sp. or Port. mulato "of mixed breed," lit. "young mule," from mulo "mule," from L. mulus (fem. mula) "mule," possibly in allusion to hybrid origin of mules. Fem. mulatta is attested from 1622.
-- http://www.etymonline.com/index.php?term=mulatto

Most dictionaries today agree with Webster1913 that mulatto refers to a person who has one parent of African descent and one of European descent. This is odd, because it has been used for over 200 years to mean any descendant of a white person and a person of another race. There are references to Indian mulattos, Native American mulattos, and of course, Latino mulattos. The recurring theme is that one parent is white, and the other is not. These days it is used to refer to anyone with distinct racial features of both European and non-European populations.

These days most of us don't use the word mulatto (a lot of us probably don't even know what it means). However, it is still a good word -- and by that I mean both that it is still in use and that it is politically correct. Well, sometimes.

Mulatto is used by many Latino and European-African groups to refer to themselves; note that this is not universal, and you should not use this word unless you know who you are talking to. Because mulatto was originally a term used by slavers and racist white folk, many people, particularly African-Americans, find it offensive. (As a side note, the related terms quadroon and octoroon are pretty much always offensive.) If you are looking for a safe way to refer to someone of mixed race, you are doomed to fail, but biracial is worth a try.

Often, though, mulatto is an acceptable word. This is probably due in part to the fact that most people consider mulatto traits to be particularly attractive, and partly because race is really very important to many people, no matter what we'd like to believe. While some groups use this term proudly (see http://www.mulatto.org/), it is increasingly redundant, as most Latin Americans and African-Americans are mulatto. You will almost never see a "pure-blood" African or Mayan. When everyone is a mulatto, there's no need to define yourself as such.

Related terms to refer to people of mixed-race include mestizo, caboclo, and moreno.

I would be interested in hearing any opinions that noders would like to offer -- just /msg me and I'll add them here.

The Debutante says: The other term you can use is 'person of multiple heritage'. But the best term I've encountered so far was in a book: 'hyphenated people'. Me, I'm Anglo-Jewish.

smartalix says: At the snotty preppy high school I went to (it took me 2 hours each way on the subway to go, my mom was so proud) a kid used to call me "mulatto" as a pejorative all the time.

Morwen says: Half-caste was used in New Zealand when I was very young. Not any more, though. Wikipedia has a better article than this site. (http://en.wikipedia.org/wiki/Half-caste)