A special Latin American acculturative context is currently developing in Chile in which native Chileans have contact with several immigrant groups, particularly newcomers from Peru. This study examines several intergroup variables including contact, national and Latino American identities, group distinctiveness, realistic threat, intergroup anxiety, and acculturation preferences as predictors of prejudice on the part of both Chilean natives and Peruvian immigrants. Three hundred Peruvian immigrants (194 females and 106 males) and 300 Chileans (199 females and 101 males) participated in the study. Acculturation preferences, perceived group distinctiveness, and especially intergroup contact were shown to be important predictors of prejudice toward out-group members. Intergroup anxiety and realistic threat mediated some of these effects. The pattern of these results also varied as a function of nationality. Theoretical as well as practical implications for further research are discussed. © 2010 The Society for the Psychological Study of Social Issues.