The power of individualist and collectivist group norms to influence intergroup and inter-individual differentiation was examined in three studies. Study 1 revealed that intergroup differentiation was lower when group norms prescribed individualism than when they prescribed collectivism. However, inter-individual differentiation was higher when group norms endorsed individualism than when they promoted collectivism. In Studies 2 and 3 we found evidence for the moderating effect of group salience on the relationship between norms and differentiation. Specifically, the effect that individualist group norms reduced intergroup differentiation but enhanced inter-individual differentiation was more pronounced when group salience was high rather than low. This finding demonstrates that conformity to a group norm prescribing individualism influences the manner in which positive differentiation is expressed. The discussion focuses on the caveats of introducing individualist group norms when attempting to reduce intergroup differentiation. Copyright © 2006 John Wiley & Sons, Ltd.