In collective punishment, a group as a whole receives negative consequences because of the actions of a few. We argue that collective punishments lead to ingroup cohesiveness and adverse intergroup relations by instigating a punishment‐revenge cycle. In four experimental studies conducted in Turkey and Germany (N = 2059), we demonstrated that collective punishment increased ingroup homogeneity, negative outgroup attitudes, and counter‐collective action intention, while it decreased perceived outgroup fairness. However, the impact on perceived fairness and negative outgroup attitudes was consistent regardless of whether all group members or only perpetrators were punished. This reveals that punishment itself influences the perception towards the punishing outgroup, regardless of the legitimacy and the target of punishment. Overall, willingness for retaliation was boosted by collective punishment; therefore, collective punishment not only fails to silence conflicts but, on the contrary, exacerbates them by fueling the urge for revenge.