The threat of free-riding makes the marshalling of cooperation from group members a fundamental challenge of social life. Where classical social science theory saw the enforcement of moral boundaries as a critical way by which group members regulate one another’s self-interest and build cooperation, moral judgments have most often been studied as processes internal to individuals. Here we investigate how the interpersonal expression of positive and negative moral judgments encourages cooperation in groups and prosocial behavior between group members. In a laboratory experiment, groups whose members could make moral judgments achieved greater cooperation than groups with no capacity to sanction, levels comparable to those of groups featuring costly material sanctions. In addition, members of moral judgment groups subsequently showed more interpersonal trust, trustworthiness, and generosity than all other groups. These findings extend prior work on peer enforcement, highlighting how the enforcement of moral boundaries offers an efficient solution to cooperation problems and promotes prosocial behavior between group members.