The prevailing explanation for illusory correlation in the stereotyping of groups is that distinctive information (minority groups' infrequent behaviors) is salient, receives enhanced encoding, and becomes highly accessible, thus biasing subsequent judgments. This distinctiveness-based explanation (DBE) depends on information distinctiveness at the time of its encoding. Information distinctiveness at encoding was manipulated, while ultimate distinctiveness was kept constant. Experiment 1, contrary to the DBE, found illusory correlations emerge regardless of distinctiveness at encoding. Experiment 2 collected process data that showed that ultimately distinctive behaviors were highly accessible at the time of judgment even when they were not distinctive at encoding. Experiments 3-5 ruled out an alternative account. A basis for illusory correlation that depends on postpresentation, but prejudgment, encoding of distinctive information is suggested.