This paper investigates two theoretical statements that are central to Social Identity Theory and Self-Categorization Theory: (1) when people identify as members of a social group, they are motivated to distinguish this group in a positive sense from relevant comparison groups, and: (2) in an hierarchically organized system of possible social identities, people may define their identity at various levels, but two levels cannot be salient in the same situation. Four studies investigate whether these hypothesized processes can be traced in natural social categories. Study 1 (N=150) found that Polish subjects had a more negative national stereotype than Dutch subjects. Study 2 (N=160) investigated whether these national stereotypes were related to the perceived distinctiveness of national traits, and to differential levels of national and European identification for Polish and Dutch subjects. Contrary to the expectations, it was found that Polish subjects identified more strongly with their national group than Dutch subjects. Both positive and negative national traits were considered more distinctive by Polish subjects than by Dutch subjects. Moreoever, Polish subjects expressed stronger European identity than Dutch subjects. Study 3 (N=161) replicated the findings of Study 2 under more controlled conditions. The Polish national stereotype was found to be largely based on negatively evaluated traits, and Polish subjects were more motivated to accentuate the distinctiveness of their national traits than Dutch subjects. Again, Polish subjects displayed stronger national and European identities. Further-more, no support was found for the expectation that Polish subjects would employ some self-protective strategy when such an opportunity was offered in this study. Similarly, in Study 4 (N=40) we found no evidence that Polish subjects utilized an alternative self-protective mechanism, namely ‘group-serving’ attributions, by means of which negative national traits could be ascribed to external circumstances. The results of these four studies are discussed in relation to Social Identity Theory, Self-Categorization Theory and political/historical developments in Europe.