Theories of categorization need to account for ways in which people use their creativity to categorize things, especially in the context of similarity. The current three-phase study is a preliminary attempt to understand how people group concepts together as well as to explore the role of similarity between concepts in creative categorization. Participants were asked to categorize a list of 100 words and the resulting categories were rated for creativity by another set of participants. In the last phase, similarity between words from all the categories was computed using latent semantic analysis. There was a significant correlation between similarity values and creativity ratings for all the categories. In addition, a new set of participants were asked to rate the similarity among the words in the least and most creative categories and there was a significant difference between the mean ratings of the two types of categories. The results indicate that creative categorization is characterized by grouping of dissimilar words. People use creative imagination to construct novel categories by linking apparently dissimilar words. (Contains 3 tables and 2 footnotes.)