This paper examines how social group boundaries are renegotiated in response to demographic change in Western societies, focusing on immigration from culturally diverse backgrounds. Using Spain as a case, we explore how both Spanish natives (the majority group, Spaniards with two Spanish-born parents) and Latin American immigrants—who share linguistic and cultural affinities with natives—react to the perceived growth of Moroccans, a more culturally distant immigrant group. We argue that exposure to Moroccan immigration prompts Latinos to align more closely with natives, reflecting a dynamic of strategic boundary-making. Natives, however, face cross-pressures: their reactions may depend on whether they emphasize Moroccans’ immigrant status or their cultural distance. Drawing on social identity and political economy theories, we use an original survey experiment that exposes two samples of Natives and Latin Americans to the sharp increase in the Moroccan population. The results show that Latinos perceive themselves as closer to Spaniards and more socially recognized, accompanied by a shift toward defining “being Spanish” in cultural rather than birth terms. We find no corresponding attitudinal change among natives, who, if anything, perceive Latinos as less similar to them. These findings suggest that boundary-making is a fluid and strategic process for immigrants that is influenced by relative cultural distance to other immigrant groups.