Drawing on social identity theory and focus theory of norms, this study investigated differences in how destination residents respond to deviant behaviors by other residents—members of their in-group—and similar behavior by tourists, who they see as the out-group. We proposed and tested a conceptual model of the transition between in-group favoritism and the black sheep effect under the moderating effect of norm strength. A mixed-method approach, including a secondary data study and three scenario-based experiments, was applied. Findings of this study revealed that focal residents showed in-group favoritism for other residents' deviant behavior compared with tourists. The contagion effect of deviant behavior was stronger among in-groups than out-groups. However, with respect to behaviors about which norms are tight, the black sheep effect comes into play, as focal residents hold a higher desire to punish in-groups’ deviant behavior than the out-group. This study has theoretical and practical implications for destination marketing organizations.