Social identity theory predicts that ingroup members should see their group as more homogeneous when confronted by a large and presumably dominant outgroup. This prediction has been supported in a series of recent studies, all of which purport to show that the usual ingroup—outgroup difference in perceived variability, i.e. outgroup homogeneity, is reversed when the ingroup is in a minority position. In all of these studies, however, the ingroup—outgroup distinction has been confounded with the size of the target group judged. The present study was conducted to overcome this confound. Subjects judged both the ingroup and outgroup, under one of two different orders, and the first group judged varied in size across subjects while the size of the second group was held constant. This permitted comparisons of the perceived variability of the second judged group (be it the ingroup or outgroup) when it followed the judgment of either a larger or equal size first group. Consistent with social identity theory, ingroups were judged as less variable when judged after a large outgroup than after a small one. This was true, however, only on measures of perceived dispersion and not on measures of perceived stereotypicality. On both sorts of measures, however, overall outgroup homogeneity was found, over and above the difference due to the comparison of the ingroup with a large or small outgroup.