Two experiments examined the effect of illusion of control on in-group favoritism found in the minimal group situation (Tajfel, Billig, Bundy, & Flament, 1971). In bilateral dependency condition, each member made allocation decisions for in-group as well as out-group participants. It was exactly the same situation used in the original studies under the minimal group paradigm, and the subjects knew that their reward allocation too depended on others' decisions. In contrast, in unilateral dependency condition, the subjects made allocation decisions knowing that theirs were not dependent on others' decisions. In Experiment 1, an in-group bias in reward distribution was found in the bilateral dependency condition, but not in the unilateral condition. In Experiment 2, it was found that only those who felt illusion of control exhibited such an in-group bias. Results of the experiments therefore confirmed that illusion of control explained in-group favoritism, as Karp, Jin, Yamagishi, and Shinotsuka (1993) originally hypothesized.