The ethnic dissonance that permeates the social and political life in Lebanon has been perceived as essentially one between Christians and Muslims, and most recently, between different denominations within the larger Christian community (mostly Orthodox, Catholics, Maronite), and different denomination within the larger Muslim community (Shia, Sunni, and Druze). In two studies, a quantitative study with 206 Lebanese university students and a qualitative study with 25 Lebanese men and women, we explored Lebanese perception of Lebanon as representing Arab or/and Western values; their cultural values, beliefs, and practices; and their tendencies for stereotyping and for cooperative behavior. The roles of religious denomination and of religiosity were investigated. Main findings show that cooperative behavior towards out-group (based on Christian/Muslim demarcation) was significantly higher for Muslim participants than for Christian participants. Christian participants were more likely to stereotype the out-group and to show in-group favoritism. As expected Muslim participants saw Lebanon as representing Arab values whereas Christian participants saw Lebanon as representing Western values. These results warrant a re-evaluation of the common misperception that Muslims are more extreme than Christians in Lebanon. They also call for a discussion of the role of perceived threat in inter-group relations and on the use of Arab/Western terminology to understand culture.