Past research has found that mere in‐group/out‐group categorizations are sufficient to elicit biases in face memory. The current research yields novel evidence that mere social categorization is also sufficient to modulate processes underlying face perception, even for faces for which we have strong perceptual expertise: same‐race (SR) faces. Using the composite face paradigm, we find that SR faces categorized as in‐group members (i.e., fellow university students) are processed more holistically than are SR faces categorized as out‐group members (i.e., students at (...) another university). Hence, holding perceptual expertise with faces constant, categorizing an SR target as an out‐group member debilitates the strong holistic processing typically observed for SR faces. (shrink)