Contact researchers have largely overlooked the potential for negative intergroup contact to increase prejudice. In Study 1, we tested the interaction between contact quantity and valence on prejudice toward Black Australians (n = 1,476), Muslim Australians (n = 173), and asylum seekers (n = 293). In all cases, the association between contact quantity and prejudice was moderated by its valence, with negative contact emerging as a stronger and more consistent predictor than positive contact. In Study 2, White Americans (n = 441) indicated how much positive and negative contact they had with Black Americans on separate measures. Although both quantity of positive and negative contact predicted racism and avoidance, negative contact was the stronger predictor. Furthermore, negative (but not positive) contact independently predicted suspicion about Barack Obama’s birthplace. These results extend the contact hypothesis by issuing an important caveat: Negative contact may be more strongly associated with increased racism and discrimination than positive contact is with its reduction.