The classification of human beings into distinct groups is a fundamental feature of social perception. Problematic phenomena, such as prejudice, discrimination, and intergroup conflict, are commonly traced back to categorization. We explore the minimal conditions under which categorization occurs and the basic mechanisms by which it affects cognition and behavior. We show that comparisons between groups are not necessary for categorization, reveal the conditions under which people overestimate or underestimate differences between groups, and sketch a model showing how social categorization gives rise to differences in the evaluation of ingroups and outgroups and to differences in the accuracy of judgments of ingroups and outgroups. We conclude with reflections on intergroup conflict and the role of moral judgment in such conflicts.