The ability of employees to interact cooperatively and collaboratively is the fulcrum of competitive advantage for organizations operating in pluralistic environments. Contact theory suggests several conditions under which effective interpersonal relationships across racial, ethnic, and cultural groups may occur. Research examining the contact hypothesis has been mixed. The explanation of this inconsistency in the research generally centers on procedural rather than cognitive aspects of the interactions. This article discusses the contact hypothesis with respect to social cognitive functioning of interaction participants. We propose that positive outcomes from application of the contact hypothesis may be influenced by the individual employees' level of cross-race interpersonal efficacy and affect regulation. An investigation of the influence of cross-race interpersonal efficacy and affect regulation may lead to a more developed theoretical understanding of the variance currently associated with the application of the contact hypothesis. (Contains 1 figure.)