What is the role of mood in intergroup discrimination? In three experiments, people in happy, sad or neutral moods allocated rewards, and formed impressions about ingroup and outgroup members. When the personal relevance of the group was low, positive mood resulted in faster, more heuristic processing and greater intergroup discrimination. In contrast, when group relevance was high, it was negative mood that enhanced intergroup discrimination following slower, motivated processing, as predicted by our recent Affect Infusion Model (AIM) (Forgas, 1995). Reaction time data and mediational analyses confirmed these processing differences. Results are interpreted as evidence for mood-induced selectivity in the way people process information about groups. The implications of the findings for real-life intergroup behavior, and for contemporary affect-cognition theories are considered.