People often have generalised expectations of trustworthiness about ingroup and outgroup members, based on previous direct and indirect experience with these groups. How do these prior biases interact with new experiences when learning about individual group members’ trustworthiness? These three studies are the first to examine the effect of group-level biases on learning about individuals’ trustworthiness. Participants from the Netherlands and the United Kingdom played iterated Trust Games with trustworthy and untrustworthy members of both ingroups and outgroups. We show that the influence of group membership on trust decisions depended on the valence of the interactions with individual group members. When interacting with trustworthy partners, people displayed outgroup favouritism throughout the game, investing higher in outgroup members than ingroup members. However, for untrustworthy partners, initial outgroup favouritism disappeared, and ingroup and outgroup members were equally distrusted by the end of the game. Our work suggests that when individual experience is integrated with group-based biases, group membership influences trust decisions over time, but mostly when experiences are positive. These findings are discussed in relation to complexity-extremity theory and previous work on learning in the Trust Game.