Although ostracism is a powerfully aversive experience, recent evidence identifies factors capable of moderating the impact of ostracism, such as in-group status and the group’s essential nature. In the current work, 67 Caucasian American participants (47 women) were included or ostracized by either same-race (i.e., Caucasian American) or other-race (i.e., African American) targets on a between-subjects basis while playing the game Cyberball. Participants then indicated the extent to which they felt similar to the other Cyberball players as well as how satisfied their basic needs (e.g., belongingness, self-esteem) were during the game. Consistent with past research, we found that in-group and out-group status moderated the magnitude of reactions to social inclusion and ostracism; that is, ostracism hurts more and social inclusion feels better when it is implemented by fellow in-group as opposed to out-group members. Importantly, we extend these previous findings by demonstrating that differential reactions to social inclusion and ostracism are mediated by changes in participants’ self-perceived similarity with in-group members. These results identify a potential mechanism responsible for the differential impact of in-group–out-group status on reactions to social inclusion and ostracism.