While moral panic remains a key sociological concept, it has been criticized for its lack of explanatory force. This article reports the results of a study designed to examine whether a social psychological approach to moral panic can (a) theorize the content as well as process of moral panic, and (b) understand both the cause and the impact of this response. This approach was tested in relation to the topic of asylum seekers. The research was based on a qualitative analysis of 120 newspaper articles, 8 focus groups with members of the host community and 25 semi-structured interviews with people who have sought asylum in the United Kingdom. A theoretical framework of social representations and social identity theory was used to explore psychological processes that may underpin host receptivity to moral panic discourse about asylum seekers and the impact such a moral panic may have on those labelled as 'folk devils'. Results indicated that social psychological processes are one of the contributory factors to host receptivity to moral panic, and strategies adopted by 'folk devils' to cope with stigmatized group membership were identified. Implications of the findings for future moral panic research are discussed.