The current study examined intergroup‐related and social‐cognitive correlates of bystanders’ acceptability judgements and their responses to bias‐based bullying of immigrant peers and to possible retaliation for the bullying. Participants included 179 immigrant‐origin and non‐immigrant‐origin youth (M
age = 13.23; SD = 1.55; 79 immigrant‐origin youth). Participants’ bystander judgements and responses to bullying and retaliation were examined via a hypothetical scenario. Further, participants’ intergroup attitudes towards immigrants and their social‐cognitive skills were evaluated. ANOVA results showed that immigrant‐origin youth judged bullying as less acceptable and retaliation as more acceptable compared to non‐immigrant‐origin youth, documenting that group membership is related to adolescents’ judgements. A similar pattern was observed in active bystander responses. Hierarchical regression analyses revealed that immigration background, intergroup process in the context of immigration, and social‐cognitive skills predict bystander responses to bullying and retaliation. This study provides important implications for anti‐bullying intervention programmes to overcome the negative consequences of retaliation in the escalation of aggressive behaviours.