The existence of subgroup differentiation and its impact on the development of in-group bias were explored among Latinos. Consistent with prior evidence, Cubans, Mexicans, and Puerto Ricans were more likely than Anglos to distinguish between Latino subgroups. However, Latinos did not distinguish equally between Cubans, Mexicans, and Puerto Ricans. Latinos differentiated their own subgroup from others but were no more likely than Anglos to differentiate between Latino subgroups to which they did not belong. Latinos even regarded the term Hispanic as more applicable to members of their own subgroup than to members of other subgroups. This tendency among Latinos to view their own subgroup as distinct from others was also linked to a bias for fellow subgroup members but not for Latinos overall. Moreover, results suggested that subgroup differentiation was based more on a desire for positive distinctiveness than on familiarity with members of different Latino subgroups.