This study evaluated the efficacy of a newly developed Arab-Jewish Class Exchange Program (CEP) in reducing stereotyping and prejudicial attitudes between Israeli-Jewish and Israeli-Palestinian children. The CEP builds on the core principles of contact theory and is designed to help participants cultivate empathy and tolerance toward the other. There were 262 4th grade students from both Israeli-Jewish and Israeli-Palestinian schools in the ethnically mixed city of Jaffa who were randomly assigned into either experimental or control classes. Members of the experimental classes engaged in CEPs activities, whereas members of the control classes engaged in general art activities without interacting with members from the other ethnic group. Stereotyping and prejudicial attitudes were assessed by 4 measures: readiness for contact with children from the other group, positive thoughts about the other, emotional prejudice, and discriminatory tendencies. Assessments were performed pre- and postintervention. Results showed that compared with students in the control classes, those in the experimental classes significantly increased their readiness for contact with students from the other ethnic group, expressed more positive thoughts about the other, and exhibited less emotional prejudice toward the other group. With regard to these 3 measures, the intervention was equally effective for both genders and ethnic groups. Should such evidence be replicated and maintained over time, CEP might prove to be a relevant intervention for reducing stereotypes, prejudices, and discriminatory tendencies among youth who live in areas affected by war, conflict, and ethnic tensions.