To shed light on the paradoxical phenomenon that third parties of interpersonal mistreatment are motivated to restore justice but often engage in unethical reactions, our research differentiates between constructive and destructive punitive reactions and tests the different moderating roles of moral identity and moral thinking orientation in the process. From two studies using different methods and samples from different cultures, we obtain consistent findings that witnessed peer-to-peer mistreatment triggered moral anger, which in turn led to both types of punitive reaction. Moral identity strengthened the relationship between witnessed mistreatment and moral anger, and rule-based moral thinking orientation weakened the relationship between anger and destructive punitive reaction, but did not influence the relationship between anger and constructive punitive reaction. The indirect effect of witnessed mistreatment on destructive punitive reaction via moral anger was strongest among participants with higher moral identity but lower rule-based moral thinking orientation. We discuss the theoretical and practical implications of our findings.