Developmental research on intergroup attitudes has identified social exclusion as a complex peer interaction that can often reflect stereotypes and bias (Killen, Mulvey, & Hitti, 2013). Given the complexity of interracial peer encounters, it is necessary to understand the conditions and contexts in which interracial social exclusion occurs and how racial minority and majority children evaluate such types of interactions. The current study investigated African American and European American children and adolescent’s evaluations of peer encounters manipulating three factors: 1) the racial composition of the peers involved (interracial vs. same-race), 2) the source of the message (messages from peers vs. parents), and 3) the form of the message (overt vs. covert). Four child-level variables were examined and included: participant race, age, level of interracial contact, and racial identity. European American participants, particularly adolescents, viewed same-race inclusion as more likely than interracial and evaluated exclusion in both contexts to be just as wrong. In contrast, African American participants viewed interracial and same-race inclusion to be just as likely, but evaluated exclusion to be more wrong in interracial than same-race contexts. With age, children viewed interracial social inclusion as less likely and even more so when interactions involved messages from parents. Interracial contact and racial identity were found to be critical features that contributed to expectations for interracial inclusion occurring in peer encounters. The findings are discussed with respect to peer and parental messages about interracial peer encounters and the conditions that are necessary for prejudice reduction.