Although relational demographers have based their arguments on self-categorization theory, they have paid little attention to the underlying processes associated with this theory. The authors examined whether demographic dissimilarity affects individuals' identification with groups by affecting the group's prototype valence and clarity and the individual's perceptions of self-prototypicality. The data showed that the proportion of women and non-Australians in 34 work groups negatively influenced prototype valence, prototype clarity, and self-prototypicality for all members of the group. These results provide support for the continued use of self-categorization theory by relational demographers. (Contains 3 tables and 2 footnotes.)