Prejudice and discrimination as justifications for social exclusion are often viewed as violations of the moral principles of welfare, justice, and equality, but intergroup exclusion can also often be viewed as a necessary and legitimate means to maintain group identity and cohesion (Rutland, Killen, & Abrams, 2010). The current study was guided by the social reasoning developmental perspective (Killen & Rutland, 2011) to examine the moral judgments of social exclusion encounters, and the degree to which cultural identity and actual contact with members of other cultural groups is related to social evaluations. Surprisingly, no research has examined how intergroup contact bears on moral judgments about Jewish-Arab encounters in the United States. The current study surveyed 241 Jewish and 249 non-Arab/non-Jewish (comparison group) 14-and 17-year-olds to assess their cultural identification, intergroup contact, and moral judgments regarding intergroup peer social exclusion situations between Jewish and Arab youth in peer, home, and community contexts. Participants overwhelmingly rejected exclusion of an outgroup member explicitly because of their group membership. Context effects emerged, and exclusion was rated as most acceptable in the community context and least acceptable in the peer context. Three factors of identity (i.e., exploration, commitment, and concern for relationships) were explored. Generally, higher identity commitment and lower identity concern for relationships were related to more inclusive evaluations. Interactions between the identity factors and intergroup contact and cultural group, however, differentially predicted evaluations of intergroup exclusion.