Previous research on refugees demonstrates that low interpersonal trust impedes their social adaptation in host countries. However, a pervasive sense of low trust among refugees, particularly within their own communities, remains less understood. Using survey and interview data from North Korean refugees in London, United Kingdom, this study probes the social processes that foster mistrust towards their in‐group peers. The quantitative findings show that refugees have created a close‐knit, in‐group community bounded by strong emotional bonds that, counterintuitively, do not necessarily develop into mutual trust. The interviews show that the asylum‐seeking experiences and the cultural norms they bring from North Korea continue to shape how they perceive in‐group contacts as potential threats. Additionally, interactions with locals, especially South Korean immigrants, amplify perceptions of inferiority and mistrust towards in‐group members. These findings illuminate the complex social process through which mutual mistrust continues to persist among refugees, offering insights into the multifaceted challenges refugees face in resettlement.