A field study was conducted in Papua New Guinea to test the hypothesis that extent of social interaction will be positively related to the degree to which individuals of one group perceive that members of the other group share value systems similar to their own (perceived value similarity) and see each other to have something in common (perceived commonality). Indigenous and Australian students at Port Moresby High (a multi‐racial school) answered a questionnaire that involved specially constructed items and that also included the Rokeach Value Survey, the Triandis and Triandis Social Distance Scale, and some other measures. Social interaction was assessed by using both direct measures (a specially constructed index, number of good friends in other group) and indirect measures (knowledge and use of Pidgin, social distance). Results for the Australian group showed that the direct measures of social interaction were positively and significantly related to perceived similarity in instrumental value systems and that both the direct and indirect measures of social interaction were positively and significantly related to perceived commonality. But the dependent variables were unrelated to perceived similarity in terminal value systems for this group. There was a general absence of significant relationships between the measures of social interaction and either perceived value similarity or perceived commonality for the indigenous students. Results were discussed in terms of the measures used and certain theoretical issues concerning the determinants of social interaction and the importance of field researc