This study examined the effects on 6- and 8-year old children (n = 160) of rejection versus acceptance by an initial group, the reason for the rejection or acceptance (personal versus category-based), and the norms (inclusion versus exclusion) of a new group to which the children were assigned, on their negative affect and attitudes towards the initial group, new group and an outgroup. Results showed that rejected compared with accepted children had a negative attitude towards the initial group, but that both were equally positive towards their new group. In addition, whereas accepted participants were less positive towards the outgroup, rejected participants displayed outgroup prejudice. Results also revealed main effects on group attitudes of participants' age and group norms, as well as a peer status × status reason interaction, but participants' negative affect was only affected by their age. The basis of the effect of peer group rejection on outgroup prejudice is discussed.