Research on forgiveness with children and adolescents is growing, yet little is known about the developmental mechanisms that underlie intergroup forgiveness in children and adolescents. In this study, youth (M = 9.39 years, SD = 1.67, N = 185, 107 female and 78 male; 54.6% European American, 20.5% African American, 8.1% Latinx, 5.9% Asian American, 3.8% multiracial, and 7.1% other) provided judgments and reasoning about forgiveness in hypothetical scenarios involving intergroup and intragroup transgressions. Participants with more sophisticated theoryof mind were more forgiving of transgressors and were more likely to differentiate their thinking about how sorry ingroup and outgroup transgressors will feel. Participants were more likely to forgive ingroup members and those that apologize than outgroup members and those who do not apologize. Results reveal that youth, especially those with more advanced theory of mind skills, have a sophisticated understanding of intergroup forgiveness. (PsycInfo Database Record (c) 2022 APA, all rights reserved).