An altruistic rationalization explanation of the interindividual–intergroup discontinuity effect proposes that intergroup interactions are more competitive than interactions between individuals because group membership creates an opportunity to rationalize selfishly motivated competitiveness as being enacted for the ingroup’s sake. To test this explanation, we compared participants whose decisions did not influence the earnings of other participants, and who therefore had no opportunity for altruistic rationalization of competitiveness, with participants whose decisions did influence the earnings of other participants, and who therefore did have an opportunity for altruistic rationalization. Competition in a prisoner’s dilemma game was greater when opportunities for altruistic rationalization were present, but this effect was significant only for participants who were low in dispositional proneness to guilt, a trait that motivates prosocial behavior. In other words, we found that dispositionally selfish individuals were most likely to become more competitive when opportunities for altruistic rationalization were present. These findings provide evidence for an additional mechanism driving the discontinuity effect.