Let $G$ be a Hausdorff, etale groupoid that is minimal and topologically principal. We show that $C^*_r(G)$ is purely infinite simple if and only if all the nonzero positive elements of $C_0(G^0)$ are infinite in $C_r^*(G)$. If $G$ is a Hausdorff, ample groupoid, then we show that $C^*_r(G)$ is purely infinite simple if and only if every nonzero projection in $C_0(G^0)$ is infinite in $C^*_r(G)$. We then show how this result applies to $k$-graph $C^*$-algebras. Finally, we investigate strongly purely infinite groupoid $C^*$-algebras.