Data from a study of Australian State stereotypes were used to test predictions derived from a functional theory of stereotypes. Both uniformity and differentiation appear to co‐exist in a single stereotype, and both were positively related to familiarity among States. However, where a measure of guessing was employed, differentiation increased greatly in stereotypes among least familiar States. The confinnation of the predictions was considered to support the hypothesised function of stereotypes as both efficient and accurate tools in intergroup relation