Stereotype Fit 2 Research documents performance decrements resulting from the activation of a negative task-relevant stereotype. We combine a number of strands of work to identify causes of stereotype threat in a way that allows us to reverse the effects and improve the performance of individuals with negative task-relevant stereotypes. We draw on prior work suggesting that negative stereotypes induce a prevention focus, and other research suggesting that people exhibit greater flexibility when their regulatory focus matches the reward structure of the task. This work suggests that stereotype threat effects emerge from a prevention focus combined with tasks that have an explicit or implicit gains reward structure. We find flexible performance can be induced in individuals who have a negative task-relevant stereotype by using a losses reward structure. We demonstrate the interaction of stereotypes and the reward structure of the task using chronic stereotypes and GRE math problems (Experiment 1), and primed stereotypes and a category learning task (Experiments 2a and 2b). We discuss implications of this research for other work on stereotype threat.