The high prevalence of forced migration in recent years has induced a shift in attitudes towards immigrants and refugees and, in turn, increasing xenophobic violence. We address this topic and estimate the effect of xenophobic attacks against refugee shelters on refugees’ mental health. For this purpose, we combine two innovative data sets: administrative records on xenophobic crime by the Federal Criminal Office and the IAB-BAMF-SOEP Survey of Refugees. Considering that the interview date is orthogonal to a hate crime taking place, we use a regression discontinuity design to identify the local causal effect. Our results indicate that hate crime has a substantial negative effect on mental health indicators, including the Mental Component Summary Score and the Patient Health Questionnaire-4. Furthermore, we show that the stock of country-specific human capital moderates the effect.