Across seven experiments and one survey (n = 4,282), people consistently overestimated out-group negativity towards the collective behaviour of their in-group. This negativity bias in group meta-perception was present across multiple competitive (but not cooperative) intergroup contexts and appears to be yoked to group psychology more generally; we observed negativity bias for estimation of out-group, anonymized-group and even fellow in-group members’ perceptions. Importantly, in the context of US politics, greater inaccuracy was associated with increased belief that the out-group is motivated by purposeful obstructionism. However, an intervention that informed participants of the inaccuracy of their beliefs reduced negative out-group attributions, and was more effective for those whose group meta-perceptions were more inaccurate. In sum, we highlight a pernicious bias in social judgements of how we believe ‘they’ see ‘our’ behaviour, demonstrate how such inaccurate beliefs can exacerbate intergroup conflict and provide an avenue for reducing the negative effects of inaccuracy. Lees and Cikara show a negativity bias in group meta-perceptions—how we believe ‘they’ see ‘our’ behaviour—demonstrate how such inaccurate, pessimistic beliefs exacerbate intergroup conflict; and they provide an avenue for reducing the negative effects of inaccuracy.