This paper examined the influence of interracial contact and racial constancy on the racial intergroup bias of young Anglo-British children. This multi-site study was conducted in areas of Great Britain that varied in terms of racial diversity. The study also investigated whether preschool children express bias on positive, but not negative, valence attributions. Anglo-British children (N = 136) between 3 and 5 years of age with different levels of interracial contact undertook a racial stereotype attribution measure and three tasks to assess racial constancy. Significantly more racial bias was shown towards the African Caribbean-British compared to the Asian-British or Oriental-British racial out-groups. As predicted, only children in racially mixed areas failed to show discrimination in favor of the white in-group on both the positive and negative trait attributions. In addition, higher racial constancy was related significantly to greater racial intergroup bias. These findings suggest that racial intergroup bias amongst 3-5 year old children may be reduced through the promotion of interracial contact, because at this age children are already beginning to develop racial constancy.