This research examines the role of media literacy training and counter-stereotypical news stones in prejudice reduction. Research participants read either stereotypical or counter-stereotypical news stories after exposure to a media literacy video or a control video. After this, they completed a paper-and-pencil questionnaire that included Likert-type scales and feeling-thermometer ratings about their feelings toward African-Americans, Asian-Indians, and Caucasian-Americans. The findings reveal that hostile prejudice is more likely to be expressed toward African-Americans and benevolent prejudice is more likely to be expressed toward Asian-Indians. As predicted, counter-stereotypical news stories as compared to stereotypical news stories decrease prejudice toward Asian-Indians. Contrary to expectations, the media literacy video seems to prime prejudices rather than suppress them, Interestingly, news stories about Asian-Indians increase hostility toward African-Americans. These comparative stereotyping are explained using modern racist beliefs and model minority stereotypes. Copyright © 2007, Lawrence Erlbaum Associates, Inc.