The concept of differential validity suggests that cognitive ability tests are associated with varying levels of validity across ethnic groups, such that validity is lower in certain ethnic subgroups than in others. A recent meta-analysis has revived the viability of this concept. Unfortunately, data were not available in this meta-analysis to correct for range restriction within ethnic groups. We reviewed the differential validity literature and conducted 4 studies. In Study 1, we empirically demonstrated that using a cognitive ability test with a common cutoff decreases variance in test scores of Black subgroup samples more than in White samples. In Study 2, we developed a simulation that examined the effects of range restriction on estimates of differential validity. Results demonstrated that different levels of range restriction for subgroups can explain the apparent observed differential validity results in employment and educational settings (but not military settings) when no differential validity exists in the population. In Study 3, we conducted a simulation in which we examined how one corrects for range restriction affects the accuracy of these corrections. Results suggest that the correction approach using a common range restriction ratio for various subgroups may create or perpetuate the illusion of differential validity and that corrections are most accurate when done within each subgroup. Finally, in Study 4, we conducted a simulation in which we assumed differential validity in the population. We found that range restriction artificially increased the size of observed differential validity estimates when the validity of cognitive ability tests was assumed to be higher among Whites. Overall, we suggest that the concept of differential validity may be largely artifactual and current data are not definitive enough to suggest such effects exist.