This study explored how children's perceptions of social group differences relate to attitudes and behaviour towards real‐world outgroups. We examined Arab‐Christian children living in Israel (N = 231, 52% female, average age 9.8 years) and randomly presented them with either Arab‐Muslim or Jewish outgroup targets. The children performed tasks measuring attitudes and prosocial behaviour towards the outgroup. Additionally, they were asked to describe the differences between their ingroup and the outgroup target. We found that children favoured the Arab‐Muslim outgroup over the Jewish outgroup, and perceived it as having fewer dimensions of difference from their ingroup. Fewer perceived dimensions of difference correlated with more positive attitudes. By the age of 12, however, perceiving more dimensions of difference was linked to increased compensatory prosocial behaviour towards the Jewish outgroup. The findings emphasize the dynamic interplay between cognitive development and intergroup experiences in understanding children's prosocial behaviour towards different outgroups.