Two experiments examined whether individual differences in prejudice are associated with different reasoning styles when targets and nontargets of prejudice are processed in the same context. High-prejudice and low-prejudice participants studied pairwise relations between four persons (one a prejudice target, three nontargets). Stereotypes were made salient by using specific ethnic names and stereotypic traits to define relations between the targets. Relations between the persons were always stereotype congruent in Experiment 1, whereas they were sometimes stereotype incongruent in Experiment 2. We examined study time, relational memory, and transitive reasoning in both experiments. The results of both experiments indicated that the high-prejudice participants studied sets of relations presented to them faster than did the low-prejudice participants. The high-prejudice participants were also more likely to show impaired relational memory and reasoning about nontarget persons but no such limitations with respect to target persons. This novel evidence that prejudice might substantially impair memory and transitive reasoning processes about nontarget persons is discussed in the light of alternative theoretical frameworks in the social cognition and emotion domains. Copyright © 2011 John Wiley & Sons, Ltd.