Observers frequently form impressions of other people based on complex or conflicting information. Rather than being objective, these impressions are often biased by observers' motives. For instance, observers often downplay negative information they learn about ingroup members. Here, we characterize the neural systems associated with biased impression formation. Participants learned positive and negative information about ingroup and outgroup social targets. Following this information, participants worsened their impressions of outgroup, but not ingroup, targets. This tendency was associated with a failure to engage neural structures including lateral prefrontal cortex, dorsal anterior cingulate cortex, temporoparietal junction, Insula and Precuneus when processing negative information about ingroup (but not outgroup) targets. To the extent that participants engaged these regions while learning negative information about ingroup members, they exhibited less ingroup bias in their impressions. These data are consistent with a model of 'effortless bias', under which perceivers fail to process goal-inconsistent information in order to maintain desired conclusions.