The goal of this article was to investigate an indirect form of intergroup differentiation in children in the context of racial attitudes: the preference for ingroup members who interact positively with other ingroup members rather than with outgroup members. Study 1 confirmed this general hypothesis with preschool and 1st-grade children, demonstrating that respondents preferred the ingroup member who played only with other ingroup members, evaluated this child more positively, and felt more similar to him or her. Studies 2 and 3 tested the boundary conditions of the phenomenon. Study 4 analyzed developmental changes demonstrating that the effect is no longer observed among 9- to 11-year-old children. Overall, these studies suggest that engaging in positive interactions with the outgroup might have its costs in terms of a relative devaluation and rejection by one's peers. Results are discussed by stressing the importance of intragroup processes for the regulation of intergroup relations among very young children.