PurposeThis study aims to understand factors that explain the use of revenge and forgiveness by Hindu and Muslim group members in reaction to the rival group’s negative reciprocal behaviour based on norms of negative reciprocity.Design/methodology/approachParticipants from Hindu (n = 175) and Muslim (n = 134) groups in India were presented with two norm-violating situations. Situation 1 involved an intergroup episode and Situation 2 involved an inter-community episode. Their own group members had engaged in the violation of the norms of the other group to which the rival group members had responded negatively. Participants anticipated the likelihood of their group members using revenge or forgiveness in response to the other group’s negative reaction. These reactions were predicted by religious, political and cultural identities, fraternalistic relative deprivation (FRD), relative power, anger and hate, and perception of the appropriateness of their reaction.FindingsSocial identities predicted intergroup revenge and forgiveness differently for the two groups in the two situations. The stronger religious identity of Muslims, not of Hindus, reduced the likelihood of their using revenge but increased it for forgiveness in both situations. Political identity associated positively with forgiveness in Situation 2 for both groups. Cultural identity predicted the likelihood of Muslims opting for forgiveness in both situations. FRD was not a significant predictor of revenge or forgiveness for Muslims. In the case of Hindus, it reduced the likelihood of their engaging in forgiveness in Situation 2. Relative power associated positively with the likelihood of Muslims, not Hindus, using revenge in both situations. Anger increased the possibility of Hindus reacting in revenge, as well as, forgiveness in the two situations. Anger did not predict revenge for Muslims but it related negatively with forgiveness in the two situations. Stronger hate was associated with revenge for Muslims. The choice of using revenge or forgiveness by own group members was positively predicted by the norms of negative reciprocity for both Hindus and Muslims.Research limitations/implicationsThe study used a convenience sample of young people which reduces the generalizability of the findings.Social implicationsThe findings of this study have implications for designing interventions for resolving intergroup conflicts in various social settings.Originality/valueThe paper adds to the norm violation theory of intergroup relations by focusing on counter-reactions and the understanding of the dynamics of intergroup conflicts.