Two different conceptions of ability are proposed. The first conception of ability is more differentiated and generally employed by adults and older children. Here ability level is defined with reference to the performance of others assuming that optimum effort was employed. High ability means higher than others. The second conception of ability is generally employed by young children and focusses on self-referenced comparisons of performance. High ability is inferred from learning or higher performance than previously displayed. It is proposed that adults use both conceptions of ability. Different situational factors are predicted to promote the adoption of one conception rather than the other leading to different cognitive and affective interpretations of performance. Three studies were conducted to investigate these hypotheses. The results demonstrate that adults generally employ the more differentiated conception of ability and that competitive conditions may foster the more differentiated conception while an intrinsic task interest tends to promote adoption of the less differentiated conception of ability. Finally, when the more differentiated conception was adopted, students anticipated less satisfaction with learning if performance was not superior to all competitors or if effort was higher than others. (Author/PN)