Perceptions of threat occupy a central place in race relations in Blumer's theory of prejudice but few direct efforts to study such perceptions exist. Extending Blumer's reasoning, we hypothesize that such perceptions are driven by a group's feelings of racial alienation within the larger social order. The more that members of a particular racial group feel collectively oppressed and unfairly treated by society, the more likely they are to perceive members of other groups as potential threats. We also examine whether such perceptions spring from simple self-interest, orthodox prejudice such as negative feelings and stereotyping, or broad beliefs about social stratification and inequality. We use data from the 1992 Los Angeles County Social Survey, a large multiracial sample of the general population, to analyze the distribution and social and psychological underpinnings of perceived group competition. Our results support the racial alienation hypothesis as well as the hypotheses positing effects for self-interest, prejudice, and stratification beliefs. We argue that Blumer's group-position framework offers the most parsimonious integration and interpretation of the social psychological processes involved in the formation of perceptions of group threat and competition.