This article describes an exploration of the distinction between typological and factorial latent variables in the domain of personality theory. Traditionally, many personality variables have been considered to be factorial in nature, even though there are examples of typological constructs dating back to Hippocrates. Recently, some reconceptualizations of typological constructs have emerged due, in part, to the availability of more rigorous methodological tools for identification of types (or nominal latent traits). These tools include multidimensional item response theory (MIRT) and latent class analysis (LCA). Two studies, involving application of these methods, are discussed in this article. The first study uses data collected using a questionnaire based on the five-factor model (FFM) of personality. The second study is based on data collected to investigate the relationships between technology use and literacy skills. The findings of both studies indicate that, while a clear preference for a factorial or a typological model may exist in the literature, a choice between the two merely based on statistical criteria may not be as clear-cut. Moreover, typological and factorial models of individual difference may coexist in certain domains of individual differences research. The article closes with a series of recommendations for future research to better understand the nature of psychological variables. (Contains 8 tables and 1 figure.)