Recent research has suggested that bullying behaviour may be understood as a group process, where those involved act in ways predicted by social identity theory (Ojala & Nesdale, 2004). One relevant phenomenon is the black sheep effect, whereby individuals evaluate deviant members of their in‐group more negatively than that of an out‐group. To examine this process, a study was conducted (N = 60) in which 10‐ and 11‐year‐old children were randomly assigned to a high‐status, peripheral or irrelevant group. They were then read a scenario in which a member of the high‐status group bullied a person outside the group and was supported by other high‐status group members. It was found that assigned group membership affected judgements of the acceptability of the bullying behaviour and the likeability of both (a) the high‐status group and (b) the high‐status group member. Specifically, evidence of a black sheep effect meant that high‐status group members showed less liking for the high‐status group member than for the high‐status group, and believed that this member deserved greater punishment than the high‐status group as a whole. Peripheral group members differentiated between the high‐status group member and the high‐status group in terms of liking but not punishment, while members of the irrelevant group did not make a distinction on either measure. Implications for the conceptualization of bullying are discussed.