Research has shown that group discussion can increase intergroup prejudice and discrimination. However, we know little about the process by which discussion has this effect. Therefore, four studies were conducted in a real-world context to investigate this process. Results suggest that discussing a negative societal stereotype (relative to individual rumination in Studies 1 and 3 and alternative discussions in Studies 2 and 3) increases intentions to engage in discrimination against the out-group target of the stereotype. This is mediated by the formation of an in-group norm which supports discrimination (Study 1) and the extent to which the discussion validates the stereotype (Study 2). A fourth study manipulated the extent to which consensus on the negative stereotype was reached through discussion. When the discussion ended in consensus, participants have greater intention to undertake collective action against the stereotyped out-group, mediated by a congruent in-group norm. These results provide evidence that the process by which discussion increases intergroup discrimination is via the formation of discriminatory local group norms.