Background The perceived threat of a contagious virus may lead people to be distrustful of immigrants and out-groups. Since the COVID-19 outbreak, the salient politicized discourses of blaming Chinese people for spreading the virus have fueled over 2000 reports of anti-Asian racial incidents and hate crimes in the United States. Objective The study aims to investigate the relationships between news consumption, trust, intergroup contact, and prejudicial attitudes toward Asians and Asian Americans residing in the United States during the COVID-19 pandemic. We compare how traditional news, social media use, and biased news exposure cultivate racial attitudes, and the moderating role of media use and trust on prejudice against Asians is examined. Methods A cross-sectional study was completed in May 2020. A total of 430 US adults (mean age 36.75, SD 11.49 years; n=258, 60% male) participated in an online survey through Amazon’s Mechanical Turk platform. Respondents answered questions related to traditional news exposure, social media use, perceived trust, and their top three news channels for staying informed about the novel coronavirus. In addition, intergroup contact and racial attitudes toward Asians were assessed. We performed hierarchical regression analyses to test the associations. Moderation effects were estimated using simple slopes testing with a 95% bootstrap confidence interval approach. Results Participants who identified as conservatives (β=.08, P=.02), had a personal infection history (β=.10, P=.004), and interacted with Asian people frequently in their daily lives (β=.46, P<.001) reported more negative attitudes toward Asians after controlling for sociodemographic variables. Relying more on traditional news media (β=.08, P=.04) and higher levels of trust in social media (β=.13, P=.007) were positively associated with prejudice against Asians. In contrast, consuming news from left-leaning outlets (β=–.15, P=.001) and neutral outlets (β=–.13, P=.003) was linked to less prejudicial attitudes toward Asians. Among those who had high trust in social media, exposure had a negative relationship with prejudice. At high levels of trust in digital websites and apps, frequent use was related to less unfavorable attitudes toward Asians. Conclusions Experiencing racial prejudice among the Asian population during a challenging pandemic can cause poor psychological outcomes and exacerbate health disparities. The results suggest that conservative ideology, personal infection history, frequency of intergroup contact, traditional news exposure, and trust in social media emerge as positive predictors of prejudice against Asians and Asian Americans, whereas people who get COVID-19 news from left-leaning and balanced outlets show less prejudice. For those who have more trust in social media and digital news, frequent use of these two sources is associated with lower levels of prejudice. Our findings highlight the need to reshape traditional news discourses and use social media and mobile news apps to develop credible messages for combating racial prejudice against Asians.