<p style="text-align: justify;"><strong>Objective. </strong>The study is aimed to clarify the understanding of the functions of prejudice in intergroup relations. A comparison of approaches to explaining intergroup relations and an analysis of the transformation of prejudice into covert, subtle forms were applied in order to achieve the aim. <br><strong>Background. </strong>The plasticity of prejudice, its transformation into covert, subtle forms in response to equal rights movements and social inadmissibility, the inconsistencies in the prejudice reduction techniques effectiveness indicates that something fundamental about the nature of prejudice is being missed by researchers. The persistent negativity of prejudice suggests that one should look for this “missing” in the concept of functions. The functions of prejudice per se have not been a focus of research attention yet. <br><strong>Methodology. </strong>The rationale was based on functional analysis in psychology, sociology and social anthropology.<br><strong>Conclusions. </strong>The persistence, “inflexibility” of a negative attitude is an essential trait of prejudice, and not just an imperfection of its first definitions. It points to the functions that prejudice fulfills in intergroup relations, that is, it leads to a positive, a useful result for the system (society and its structure). Features of the transformation of prejudice into covert forms show that preserving the entitativity and the boundaries of the group (which is the unit of this system) in a “loose” egalitarian society seems to be prejudice function.</p>