To date, the effect of intercultural contact on racial prejudice toward the out-group has been, for the most part, examined and studied by way of face-to-face encounters but the effect has seldom been investigated in a computer-mediated interaction. The objective of this research, therefore, is to look into the effect of intercultural contact on the level of prejudice among intercultural partners in both face-to-face and computer-mediated communication (CMC) environment from the perspective of the Intergroup Contact Theory. One hundred participants were involved in the time series experiment and they were randomly assigned to intra-cultural versus intercultural conditions in the two-channel conditions namely face-to-face and CMC. Participants were required to interact in pairs with their 'zero history' partners. Parallel to the premise of the theory, for the face-to-face group, the overall level of prejudice among the intercultural communicative partners was significantly lower as compared to those in the intra-cultural group. However, the effect of intercultural contact in the CMC group failed to yield significant findings despite the decreasing trend of the level of prejudice over the four-week period among the intercultural partners. The study provides greater insight into the issue of intercultural integration in Malaysia. With much intercultural interaction and collaboration conducted online nowadays, the study provides preliminary evidences on its effectiveness in reducing perceptual prejudice.