Mississippi Morning by Ruth Vander Zee, illustrated by Floyd Cooper (Eerdman's, 2004). James always accepted that blacks and whites couldn't eat at the same tables or drink from the same fountains, but he's shocked and horrified when his fishing buddy LeRoy tells him about the misdeeds of the Klan, and even more stricken to see his own father walking home one morning in a white hood and robe. Ages 9-up.
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Despite the traditional focus of multicultural children's literature on racism (among other things), it is rare and important to see a story in which a child must confront racist and violent actions coming from his own family.
Mississippi Morning is a historical book, set in the south, which is completely appropriate; but unfortunately, it should also be noted that the Klan still exists today and by no means restricts its activities or membership to the southern United States.