Research Findings: An empirical investigation was conducted to test young Palestinian, Jordanian, Israeli-Palestinian, and Israeli-Jewish children's (N = 433; M = 5.7 years of age) cultural stereotypes and their evaluations of peer intergroup exclusion based upon a number of different factors, including being from a different country and speaking a different language. Children in this study lived in a geographical region that has a history of cultural and religious tension, violence, and extreme intergroup conflict. Our findings reveal that the negative consequences of living with intergroup tension are related to the use of stereotypes. At the same time, the results for moral judgments and evaluations about excluding peers provide positive results about the young children's inclusive views regarding peer interactions. Practice: These findings indicate that practitioners working with young children should focus on inclusion in peer contexts. Curricula, media, and social intervention programs must begin in early childhood before children begin to use stereotypes in peer situations, particularly when children from other cultural and ethnic backgrounds play together. (Contains 1 table and 3 figures.)