A diverse and inclusive workplace has become a strategic priority for organizations seeking to enhance employee well-being and organizational effectiveness. This study examines the influence of diversity climate on employee well-being among employees in the Information Technology (IT) sector in Coimbatore. Grounded in Social Exchange Theory (SET), the study investigates the effects of five dimensions of diversity climate—organizational fairness, inclusion, equal employment opportunity, diversity support practices, and respect for diversity—on employee well-being, comprising psychological, physical, social, and workplace well-being. A quantitative research design was adopted using a structured questionnaire administered to 412 IT employees selected through purposive sampling. The collected data were analyzed using IBM SPSS 29 and AMOS 29, employing descriptive statistics, reliability analysis, Confirmatory Factor Analysis (CFA), and Structural Equation Modelling (SEM). The findings indicate that all five dimensions of diversity climate have a significant positive influence on employee well-being, with diversity support practices and inclusion demonstrating the strongest effects. The measurement and structural models exhibited satisfactory reliability, validity, and goodness-of-fit, confirming the robustness of the proposed model. The study contributes to the existing literature by extending the application of Social Exchange Theory to the Indian IT context and validating diversity climate as a multidimensional construct influencing employee well-being. The findings provide valuable implications for organizational leaders and human resource practitioners to develop inclusive policies, promote equitable workplace practices, and strengthen employee well-being through effective diversity management. The study concludes that fostering a positive diversity climate is essential for creating healthier, more engaged, and high-performing workforces capable of sustaining organizational competitiveness