This chapter discusses the biases, stereotypes, prejudice and discrimination. It describes major theories used in diversity research and provides two major concepts based on U. S. employment law to identify discrimination in the workplace, such as, adverse impact and disparate treatment. The major theories used in diversity research include self-categorization/social categorization, realistic group conflict, social identity, similarity attraction, relational demography, modern sexism and modern racism, social dominance, critical race and status construction. People use their social identity with certain groups to bolster their self-image. Modern racism theory and modern sexism theory argue that people have deep-seated prejudice but nevertheless behave in socially desirable ways because they are aware that old-fashioned prejudice is socially unacceptable. Individuals who ascribe to beliefs in line with social dominance theory are said to have high social dominance orientation. Critical race theory has its origins in law research, and it grew out of dissatisfaction with the results of the civil rights movement in the United States.