This study suggests that generational affiliation is significant in explaining distinctive ethnic perceptions among dominant groups. In Israel, the Ashkenazim, Jews of European descent, constitute the political, social, and economic elite. In‐depth interviews with two generations of Ashkenazim showed similarities in ethnic perceptions, but also revealed important differences among the two generations. For the older group, Ashkenaziness is both an ethnicity‐free norm of Israeliness and a product of European culture performed by both the marking and unmarking of cultural boundaries. The younger group, on the other hand, self‐identifies as Ashkenazi, but interprets Ashkenaziness as a thin ethnicity and primarily a position of social power. This evolution in ethnic perceptions is explained by the historical specific interface of three factors: dominant discursive orders of the era, state institutions and policies, and the encounter with the “other.”