This research addressed the apparent inconsistency in the literature between perceptual development as a progression of increasing separability (Shepp, 1978; Smith & Kemler, 1977, 1978) and categorization as a process based on overall similarity relations across development (Mervis, 1980; Mervis & Rosch, 1981). The influence of task demands, stimulus set similarity, and age on organizing principles of perceptual similarity were examined. Findings suggest that stimulus set similarity is an important factor in determining organizing principles of similarity for both nursery school children and adults.