The present research addresses the specific impairments of an intergroup negotiation context with respect to intergroup competitiveness and partial impasses. We examined whether mediation-arbitration (med-arb), a hybrid form of third-party intervention, is conducive to overcoming the detrimental effect of an intergroup negotiation context. Study 1 demonstrated the detrimental effect of an intergroup negotiation context and showed that mediation-arbitration is an effective means to overcome this detrimental effect in a distributive negotiation task. The findings of Study 1 further suggest that the beneficial effect of med-arb on negotiation outcomes can be explained in terms of an alleviation of intergroup competitiveness. Study 2 replicated the beneficial effect of mediation-arbitration in an integrative intergroup negotiation and, by means of comparing mediation-arbitration to straight mediation, corroborated the notion that the anticipated arbitration in med-arb is a necessary precondition to alleviate the competitiveness throughout the mediated negotiation process. Study 2 further revealed that the beneficial effect of med-arb on intergroup competitiveness can be explained in terms of the perceived decision control that disputants ascribed to the third party. The findings of the present research are discussed with respect to their contribution to future research on intergroup negotiation and third-party intervention.