The notion of illusory correlations based on distinctiveness is criticized on both methodological and conceptual grounds. When the relative number of positive and negative behaviors in a majority and a minority group is constant, but the base rate of negative behaviors is low, a more negative impression is created of the minority than the majority (as evident in frequency estimates, cued recall, and impression judgments). This phenomenon is usually explained in terms of the enhanced distinctiveness of infrequent events. However, theoretical arguments and some empirical studies are provided for an alternative explanation of the illusion in terms of information loss and regressive judgments. The imprecise and often circular use of the term distinctiveness is criticized. However, the validity and social psychological relevance of the illusion itself remains unquestioned.