There exists a racial income gap in America: Blacks earn ∼38% less than Whites, but little is known about its relation to interracial psychological outcomes. Toward this end, the present research examined associations between the Black–White income gap and perceptions of interracial competition and, subsequently, negative intergroup outcomes. Study 1 extracted data from a large, preexisting data set (N = 2,543) and provided initial support for the hypothesis that higher levels of racial income inequality are associated with increased perceptions of competition. Study 2 then recruited approximately equal numbers of White and Black participants (N = 1,731) and demonstrated that increases in racial income inequality predict increased perceptions of competition, discrimination, behavioral avoidance, and intergroup anxiety. Implications for theory development and public policy are discussed.