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Although research has shown the effects of empathy manipulations on prejudice, little is known about the long-term relation between empathy and prejudice development, the direction of effects, and the relative effects of cognitive and affective aspects of empathy. Moreover, research has not examined within-person processes; hence, its practical implications are unclear. In addition, longitudinal research on development of prejudice and empathy in adolescence is still scarce. This 3-wave study of adolescents (N = 574) examined a longitudinal, within-person relation between empathy and anti-immigrant attitudes. The “standard” cross-lagged model showed bidirectional effects between empathic concern, perspective taking, and anti-immigrant attitudes. In contrast, the Random-Intercept Cross-Lagged Panel Model showed that only perspective taking directly predicted within-person changes in anti-immigrant attitudes. Empathic concern predicted within-person changes in anti-immigrant attitudes indirectly, via its effects on perspective taking. No effects of anti-immigrant attitudes on within-person changes in empathy were found. The relations between empathic concern, perspective taking, and anti-immigrant attitudes were significant at the between-person level. In addition, the results showed changes in anti-immigrant attitudes and perspective taking and a change in empathic concern in mid- but not late adolescence. The results provide strong evidence for the effects of perspective taking on development of anti-immigrant attitudes in adolescence. They also suggest that the link between empathic concern and adolescents’ anti-immigrant attitudes can be explained by indirect, within-person effects and by between-person differences. The findings suggest that programs aimed at reducing anti-immigrant attitudes in adolescence should work more closely with youth perspective taking and empathic concern.