The university action followed the national organization of Delta Upsilon fraternity, which suspended the chapter earlier yesterday.
The incident began late Tuesday night when a group of white students walked past two female members of the Legion of Black Collegians' Activities Committee.
The legion said in a statement that one of the white students yelled a racial slur at the women, who then contacted other legion members. Police then arrived.
Justin Kirk, executive director of Delta Upsilon International, said in a statement that the emergency suspension would be in effect while the incident is investigated.
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"Racism and sexism have no place in our fraternity and we expect our members to be positive contributors to inclusive campus environments," Kirk said.
A suspended fraternity cannot use university facilities or participate in campus activities such as Homecoming and social events, the university said.
The incident follows campus turmoil last year, when student protests over what some saw as administrators' indifference to racial issues culminated in the resignations of some top university leaders in October.
The university said Wednesday that police have identified the students involved, and that the Office of Student Conduct and the Office of Civil Rights & Title IX have been notified and "are taking appropriate action."
"We have zero tolerance for actions like this," Foley said.