This chapter outlines the dynamics of categoric unit or the processes by which perceived differences among individuals are created, sustained, and changed. Blau's theory of macrosocial processes is converted to a more meso-level theory and then revised to emphasize the dynamics of stratification, inequality, prejudice, and discrimination in the creation and maintenance of categoric-unit distinctions. The macrolevel environments influence on the formation of parameters distinguishing individuals as different are analyzed, with particular emphasis on stratification and cultural ideologies legitimating discrimination and domination. Then, the microlevel environments operating at the level of the encounter are examined, with an eye to understanding how interpersonal processes create, sustain, or potentially change parameters marking differences. The chapter closes with the first explanatory principles of meso-dynamic processes—in this case, categoric units.