The present research intends to shed light on an identity-based intergroup effect in negotiations by demonstrating that the mere perception of the negotiation as an instance of intergroup interaction suffices to impair the negotiation process and to deteriorate its outcomes. It was predicted that negotiators’ salient group identities increase their competitive perceptions, reduce their concession behavior, and consequently lead to inferior negotiation outcomes. Study 1 revealed that solo negotiators with salient group identities achieved lower joint outcomes than negotiators with salient individual identities. Study 2 systematically explored the underlying mechanisms of this identity-based intergroup effect by analyzing negotiators’ concession-making behaviors over the course of the negotiation. The results of the second experiment replicate the findings of the first study and further show that the detrimental effect of an identity-based intergroup context will occur in distributive as well as integrative negotiations. The findings of the present research are discussed with respect to their contribution to future research on intergroup negotiation.