This chapter reviews research and theory on the social cognitive underpinnings of both stereotype development in children and stereotype formation among adults. Although research on these topics has developed largely independently from another, the two areas of research may inform one another in important ways. Toward this end, the authors have tried to draw attention to both similarities and differences in the ways that stereotypes form in these two contexts. Although children and adults appear to possess many of the same fundamental cognitive abilities that support categorization and stereotype formation, there are important differences in how the processes operate and in the important roles that social motives play among adults. In addressing these issues, focus will be placed on the concepts of essentialism, illusory correlation, and category accentuation. The authors believe that a more robust integration of these research topics would offer a rich source of progress in understanding stereotyping.