Purpose – In a multicultural context, this study aims to investigate the effect of ingroup versus outgroup categorization and stereotypes on residents' emotional and behavioral reactions in neighbor-to-neighbor conflicts. Based on the literature on the “black sheep effect”, the authors predicted that residents would actually be more irritated by ingroup than outgroup antagonists. Secondly, they predicted that reactions to deviant behavior by an outgroup antagonist would be shaped by the valence of stereotypes about the respective groups. Design/methodology/approach – Residents with either a native-Dutch or a Turkish background (n=529) completed a questionnaire on outgroup stereotypes, and responded to a conflict situation in which the ethnicity of an antagonist was manipulated between subjects. Findings – Supporting the black sheep effect, results reveal that both native-Dutch and Turkish residents reported more negative emotions towards an ingroup than an outgroup antagonist. In addition, when confronting an outgroup antagonist, stereotype negativity was related to more negative emotions and intentions for destructive conflict behavior. Social implications – The current study demonstrates that residents may actually get irritated more easily by ingroup than outgroup antagonists. Reactions to outgroup antagonists are further moderated by stereotype valence; negative outgroup stereotypes may lead to less tolerance towards outgroup antagonists and higher chances for conflict escalation. Originality/value – This is the first paper in which evidence for the black sheep effect is obtained in a field study and simultaneously for majority and minority members. In addition, evidence is presented that emotions may mediate the influence of the antagonist's group membership on conflict behavior.