The relation between similarity and categorization has recently come under scrutiny from several sectors. The issue provides an important inroad to questions about the contributions of high-level thought and lower-level perception in the development of people`s concepts. Many psychological models base categorization on similarity, assuming that thing belong in the same category because of their similarity. Empirical and in-principle arguments have recently raied objections to this connection, on the grounds that similarity is too unconstrained to provide an explanation of categorization, and similarity is not sufficiently sophisticated to ground most categories. Although these objections have merit, a reassesment of evidence indicates that similarity can be sufficiently constrained and sophisticated to provide at least a partial account of many categories. Principles are discussed for incorporating similarity into theories of category formation.