We argue that the relational model that people use for organizing specific social interactions in any culture determines whether people self-enhance. Self-enhancement is not a functional consequence of the (independent or interdependent) cultural model of self. Across three studies, Danes self-enhanced considerably less than did Americans but were more independent on the Twenty Statements Test, made more individual attributions about social life, made more autonomous scenario choices, and were more independent on the self-construal scale. Public modesty did not account for these Danish-American differences in self-enhancement. However, Danes practiced interpersonal leveling, preferring equality of outcome more than did Americans. This leveling strongly and inversely predicted self-enhancement within both cultures and mediated Danish-American differences in self-enhancement. In contrast, no independence measure systematically predicted self-enhancement within both cultures nor mediated the cultural differences in self-enhancement. This dissociation of independence and self-enhancement demonstrates that self-enhancing downward social comparisons are not functionally necessary for an independent concept of self. We conclude that social relationships, not the model of the self, mediate the mutual constitution of psyche and culture. Copyright © 2006 John Wiley & Sons, Ltd.