Cooperation is crucial to achieve and sustain public goods. An obstacle to cooperation is ingroup favoritism, the tendency to cooperate more with ingroup members than outgroup members. Past research and theoretical frameworks on ingroup favoritism largely focus on settings of equality, where individuals have access to equal resources, endowments, and productivity. However, many social interactions are often characterized by inequality. Economic disparities exist even in the most equal societies and therefore should be accounted for when examining ingroup favoritism in cooperation. The present experimental laboratory study (expected N = 240) investigates whether ingroup favoritism in cooperation differs between equal and unequal contexts. Furthermore, we model whether an individual’s socioeconomic status in society influences this effect. To do so, we utilize a 2 (advantaged vs disadvantaged status; between-subjects) x 2 (ingroup vs outgroup partner matching; within-subjects) x 3 (equality vs low inequality vs high inequality; within-subjects) mixed design. Participants’ cooperation is measured in a two-person repeated prisoner’s dilemma game involving stranger matching in groups of eight participants. Preliminary findings reveal that cooperation decreases as inequality rises, and that individuals cooperate more with ingroup members than outgroup members. However, this ingroup favoritism declines as inequality increases, which is driven by disadvantaged individuals in highly unequal settings showing reduced ingroup favoritism. We review the implications of these findings on current theoretical frameworks of ingroup favoritism in cooperation.