According to social identity theory, low self-esteem motivates group members to derogate out-groups, thus achieving positive in-group distinctiveness and boosting self-esteem. According to the Frankfurt School and status politics theorists, low self-esteem motivates collective narcissism (i.e., resentment for insufficient external recognition of the in-group's importance), which predicts out-group derogation. Empirical support for these propositions has been weak. We revisit them addressing whether (a) low self-esteem predicts out-group derogation via collective narcissism and (b) this indirect relationship is only observed after partialing out the positive overlap between collective narcissism and in-group satisfaction (i.e., belief that the in-group is of high value and a reason to be proud). Results based on cross-sectional (Study 1, N = 427) and longitudinal (Study 2, N = 853) designs indicated that self-esteem is uniquely, negatively linked to collective narcissism and uniquely, positively linked to in-group satisfaction. Results based on cross-sectional (Study 3, N = 506; Study 4, N = 1,059; Study 5, N = 471), longitudinal (Study 6, N = 410), and experimental (Study 7, N = 253) designs corroborated these inferences. Further, they revealed that the positive overlap between collective narcissism and in-group satisfaction obscures the link between self-esteem and out-group derogation. (PsycInfo Database Record (c) 2020 APA, all rights reserved).