To test social and cognitive variables that may affect the development of subjective group dynamics, the authors had 224 children between the ages of 5 and 12 years evaluate an in-group and an out-group and normative and deviant in-group members under conditions of high or low accountability to in-group peers. In-group bias and relative favorability to normative versus deviant in-group members (differential evaluation) increased when children were accountable to peers and as a function of perceptions of peer group acceptance of these members (differential inclusion). These effects were significantly larger among older children. Multiple classification ability was unrelated to judgments of group members. This study shows that the development of subjective group dynamics involves an increase in sensitivity to the normative aspects of the intergroup context.