Although the cross-race effect (CRE) is a well-established phenomenon, both perceptual-expertise and social-categorization models have been proposed to explain the effect. The two studies reported here investigated the extent to which categorizing other people as in-group versus out-group members is sufficient to elicit a pattern of face recognition analogous to that of the CRE, even when perceptual expertise with the stimuli is held constant. In Study 1, targets were categorized as members of real-life in-groups and out-groups (based on university affiliation), whereas in Study 2, targets were categorized into experimentally created minimal groups. In both studies, recognition performance was better for targets categorized as in-group members, despite the fact that perceptual expertise was equivalent for in-group and out-group faces. These results suggest that social-cognitive mechanisms of in-group and out-group categorization are sufficient to elicit performance differences for in-group and out-group face recognition.