The current study investigates whether mere stereotypes are sufficient to modulate empathic responses to other people's (mis)fortunes, how these modulations manifest in the brain, and whether affective and neural responses relate to endorsing harm against different outgroup targets. Participants feel least bad when misfortunes befall envied targets and worst when misfortunes befall pitied targets, as compared with ingroup targets. Participants are also least willing to endorse harming pitied targets, despite pitied targets being outgroup members. However, those participants who exhibit increased activation in functionally defined insula/middle frontal gyrus when viewing pity targets experience positive events not only report feeling worse about those events but also more willing to harm pity targets in a tradeoff scenario. Similarly, increased activation in anatomically defined bilateral anterior insula, in response to positive events, predicts increased willingness to harm envy targets, but decreased willingness to harm ingroup targets, above and beyond self-reported affect in response to the events. Stereotypes' specific content and not just outgroup membership modulates empathic responses and related behavioral consequences including harm.