Colors carry meaningful psychological signals. We hypothesized that the color red serves as a powerful cue in competition, affecting both actors and perceivers. Using simplified poker games we investigated the psychological meaning of color in competitive interaction, by examining how the color of chips (red vs. blue or white) used by participants or their competitors affected behavior. Although chip color was objectively unrelated to the chips' value or competitors' strength, perceiving competitors using red chips renders competitors more intimidating, which leads perceivers to withdraw. Furthermore, actors who used red chips felt more dominant, which led them to enhanced competitive approach. Displaying red thus makes actors feel stronger and increases competitive approach; perceivers of displays of red in competitors feel intimidated and withdraw from competing.