A core question in social categorization research focuses on how children organize social categories. We examined whether 4- and 5-year-olds: (a) identify the social category membership of a person based on relational interactions between that person and a known category member; and (b) use these social categories to guide inferences about certain shared properties. Preschoolers (n = 229) were introduced to 2 novel social categories (comprised of diverse individuals), each possessing a distinct property (e.g., dancing vs. singing). During test trials, children witnessed members from each category direct helpful, harmful, or neutral actions toward ambiguous characters. In Experiment 1, when a member of a category exhibited helpful actions toward an ambiguous character, children inferred that the ambiguous character belonged to the same category as the helper. In contrast, when a group member directed harmful actions toward the ambiguous character, children inferred that ambiguous character belonged to the alternate category. In neither case did children extend category properties to the new member. In Experiment 2, category properties were introduced as mutually exclusive social conventions. Here, children used helpful and harmful actions to identify the social category of an ambiguous character and generalize the property. In Experiment 3, when social categories were introduced using only shared physical location and shared activity as a marker of category membership, children did not use helpful or harmful behavior to predict category membership. Together findings indicate that children can identify social category membership based on observed social interactions when meaningful category information is available.