The ecological and evolutionary success of social insects relies on their ability to efficiently discriminate between group members and aliens. Nestmate recognition occurs by phenotype matching, the comparison of the referent (colony) phenotype to the one of an encountered individual. Based on the level of dissimilarity between the two, the discriminator accepts or rejects the target. The tolerated degree of mismatch is predicted by the acceptance threshold model, which assumes adaptive threshold shifts depending on the costs of discrimination errors. Inherent in the model is that rejection (Type I) and acceptance (Type II) errors are reciprocally related: if one type decreases, the other increases. We studied whether alarm pheromones modulate the acceptance threshold. We exposed Camponotus aethiops ants to formic acid and subsequently measured aggression towards nestmates and non-nestmates. Formic acid induced both more non-nestmate rejection and more nestmate acceptance than a control treatment, thus uncovering an unexpected effect of an alarm pheromone on responses to nestmates. Nestmate discrimination accuracy was improved via a decrease of both types of errors, a result that cannot be explained by a shift in the acceptance threshold. We propose that formic acid increases the amount of information available to the ants, thus decreasing the perceived phenotypic overlap between nestmate and non-nestmate recognition cues. This mechanism for improved discrimination reveals a novel function of alarm pheromones in recognition processes and may have far-reaching implications in our understanding of the modus operandi of recognition systems in general.