Children’s perceptions of similarity and dissimilarity between in- and out-groups and their associations with intergroup attitudes were examined. Using mixed qualitative and quantitative methods, 5- and 8-year-old Jewish-Israeli children (N = 100, 48 % girls) were investigated. They were asked about Arabs (which are considered a conflict out-group). Specifically, they were asked whether a Jewish girl/boy and an Arab girl/boy are similar or dissimilar and in what way. They were also asked about their attitudes towards Arabs. In general, children reported more intergroup dissimilarities than similarities between Jews and Arabs. Children’s perceptions revealed that they considered three types of properties as fundamental for intergroup (dis)similarity: appearance, psychological characteristics, and social identity. The results indicate that children form intergroup dissimilarity perceptions at an early age, but only at about 8 years of age do these perceptions become associated with negative attitudes towards the out-group. These findings highlight the importance of promoting early awareness of similarities between groups to mitigate the development of negative attitudes as children grow older.