Effective category‐based induction requires understanding that categories include both fundamental similarities between members and important variation. This article explores 4‐ to 11‐year‐olds’ (n = 207) and adults’ (n = 49) intuitions about this balance between within‐category homogeneity and variability using a novel induction task in which participants predict the distribution of a property among members of a novel category. Across childhood, children learned to recognize variability within categories—showing increasing sensitivity to the role of property type and domain in constraining inferences. Children below the age of 6 showed evidence for a domain‐general assumption that categories are homogeneous—generalizing properties broadly to 100% of category members. These studies support important developmental changes in category representations that may influence category‐based induction.