Living in complex social systems requires perceptual and cognitive capacities for the recognition of group membership and individual competitors. Olfaction is one means by which this can be achieved. Many animals can identify individual proteins in urine, skin secretions, or saliva by scent. Additionally, marking behaviour in several mammals and especially in horses indicates the importance of sniffing conspecifics' faeces for olfactory recognition. To test this hypothesis, we conducted two separate experiments: Experiment 1 addressed the question of whether horses can recognise the group membership of other horses by sniffing their faeces. The horses were presented with four faecal samples: (1) their own, (2) those of other members of their own group, (3) those of unfamiliar mares, and (4) those of unfamiliar geldings. Experiment two was designed to assess whether horses can identify the group member from whom a faecal sample came. Here, we presented two groups of horses with faecal samples from their group mates in random distribution. As controls, soil heaps and sheep faecal samples were used. In experiment one, horses distinguished their own from their conspecifics' faeces, but did not differentiate between familiarity and sex. In experiment two, the horses from both groups paid most attention to the faeces of the horses from which they received the highest amount of aggressive behaviours. We therefore suggest that horses of both sexes can distinguish individual competitors among their group mates by the smell of their faeces.