Drawing from social identity theory (Tajfel & Turner, 1979), an experiment was carried out to determine the extent to which children's attitudes towards bullying could be moderated by in-group norms and perceived threat to group distinctiveness. The study investigated the responses of 120 male primary school students aged 10-13 years from five schools. The children read a story about a popular in-group and an unpopular out-group which involved the manipulation of three variables: the norms of the in-group (bullying vs. fairness); distinctiveness threat (out-group similarity vs. out-group difference); and the behaviour of the in-group character towards the out-group character (bullying vs. helpful). It was predicted that a perceived threat to group distinctiveness, represented by similarity between the in-group and the out-group, and salient group norms that prescribed either bullying or fairness, would moderate the acceptability of bullying behaviours. Two story response measures were analysed: in-group character liking and whether the in-group character would be retained as a group member following his behaviour. The strongest support for social identity theory was revealed in the retention of in-group character variable. The in-group character was much more likely to have been retained as a group member when he behaved in accordance with group norms. Evidence was also found that bullying was more acceptable when directed at an out-group member who was similar and therefore possibly represented a threat to the in-group.