A structural equation model tested the role of degree of identification with a group (Americans) and level of collective self-esteem as determinants of outgroup derogation under identity-threatening and non-threatening conditions. High identification and reductions in collective self-esteem following a threat to that identity lead to outgroup derogation, but level of collective self-esteem did not predict outgroup derogation in the no-threat condition. The consequences of derogating both threat-relevant (Russians) and threat-irrelevant nationalities for subsequent self-esteem were assessed. As predicted by social identity theory, higher amounts of derogation of the threat-relevant outgroup in the identity-threatened condition elevated subsequent collective self-esteem. Derogation of threat-irrelevant outgroups did not have this positive esteem consequence; in fact, increased derogation of irrelevant outgroups reduced subsequent self-esteem. In the no-threat condition, amount of derogation directed towards either type of outgroup did not significantly influence subsequent self-esteem, with the overall pattern being opposite to what was observed in the threat condition. Implications for theories concerning self-processes as instigators of outgroup derogation and the consequences of intergroup comparisons for collective self-esteem are discussed.