Individuals who qualify equally for membership in more than one racial group are not judged as belonging equally to both of their parent groups, but instead are seen as belonging more to their lower status parent group. Why? The present paper begins to establish the role of individual differences and social context in hypodescent, the process of assigning multiracials the status of their relatively disadvantaged parent group. Specifically, in two experiments, we found that individual differences in social dominance orientation—a preference for group-based hierarchy and inequality—interacts with perceptions of socioeconomic threat to influence the use of hypodescent in categorizing half-Black, half-White biracial targets. Importantly, this paper begins to establish hypodescent as a “hierarchy-enhancing” social categorization.