Intergroup bias is the tendency for people to inflate positive regard for their in-group and derogate the out-group. Across two online experiments (N = 922) this study revisits the methodological premises of research on language as a window into intergroup bias. Experiment 1 examined (i) whether the valence (positivity) of language production differs when communicating about an in- vs. out-group, and (ii) whether the extent of this bias is influenced by the positivity of input descriptors that were initially presented to participants as examples of how an in-group or out-group characterize themselves. Experiment 2 used the linear diffusion chain method to examine how biases are transmitted through cultural generations. Valence of verbal descriptions were quantified using ratings obtained from a large-scale psycholinguistic database. The findings from Experiment 1 indicated a bias towards employing positive language in describing the in-group (exhibiting in-group favoritism), particularly in cases where the input descriptors were negative. However, there was weak evidence for increased negativity aimed at the out-group (i.e., out-group derogation). The findings from Experiment 2 demonstrated that in-group positivity bias propagated across cultural generations at a higher rate than out-group derogation. The results shed light on the formation and cultural transmission of intergroup bias.