Recognition of own-race faces is superior to recognition of other-race faces. In the present experiments, we explored the role of top-down social information in the encoding and recognition of racially ambiguous faces. Hispanic and African American participants studied and were tested on computer-generated ambiguous-race faces (composed of 50 % Hispanic and 50 % African American features; MacLin & Malpass, Psychology, Public Policy, and Law 7:98-118, 2001). In Experiment 1, the faces were randomly assigned to two study blocks. In each block, a group label was provided that indicated that those faces belonged to African American or to Hispanic individuals. Both participant groups exhibited superior memory for faces studied in the block with their own-race label. In Experiment 2, the faces were studied in a single block with no labels, but tested in two blocks in which labels were provided. Recognition performance was not influenced by the labeled race at test. Taken together, these results confirm the claim that purely top-down information can yield the well-documented cross-race effect in recognition, and additionally they suggest that the bias takes place at encoding rather than testing.