Like other group-living species, humans often display ingroup favoritism, that is they cooperate with ingroup members more than with outgroup members. Theoretically, ingroup favoritism should imply that people also compete less with ingroup members than with outgroup members. Across five empirical studies (with data from 51 societies), we show that in situations where people could invest to take other’s resources, and invest to protect against such exploitation, they are surprisingly more competitive with ingroup than outgroup members. This ‘nasty neighbour’ behaviour emerged independent of ingroup favoritism and trust towards others that have the same (versus different) nationality. That humans can exhibit both parochialism and nastiness within groups is difficult to reconcile with existing theories on the evolution of cooperation in structured populations.