Decades of research have shown that humans cooperate with ingroup members more than with strangers and individuals from rivaling out-groups. Such parochial cooperation is often taken as suggesting that humans also compete more between than within groups. Whereas this could explain intergroup polarization and conflict, competition is not the flip side of cooperation, and direct evidence for parochial competition is missing. Here we provide a first test of the hypothesis that people compete less with ingroup members than with outgroup members, and unidentified strangers. Against pre-registered predictions, however, people competed systematically and consistently more with ingroup members, than outgroup members and strangers, in a large-scale dyadic contest experiment across 51 nations around the world (N=12,863), in a lab-in-the-field study among tribes in Kenya (N=552), and in a pre-registered replication in the United Kingdom (N=401). Furthermore, people were also more competitive with individuals from geographically (and culturally) closer compared to more distant national outgroups (Study 1 & 3). Concerns over ingroup status and competition for scarce resources emerged as potential reasons for being more competitive with ingroup rather than outgroup individuals. Altogether, results challenge the prevailing view that human competition is as parochial as cooperation and document the existence of what in other species is known as the nasty neighbor effect.