This study examined how social reality restricts children's tendency for in-group favoritism in group evaluations. Children were faced with social reality considerations and with group identity concerns. Using short stories, in this experimental study, conducted among 3 age groups (6-, 8-, and 10-year-olds), the authors examined the trait attribution effects of reality constraints on eye-color differences and national group differences. The results show that the trait attributions of all age groups were restricted by the acceptance of socially defined reality. In addition, when the information about reality was not considered accurate, only the youngest children showed positive in-group favoritism. It is argued that these findings are useful in trying to reconcile some of the divergent and contrasting findings in the developmental literature on children's intergroup perceptions and evaluations.