The stereotype literature views responses of a subordinated group to stereotypes as a unified attempt to counter the control and domination of its identity. Complexities that exist within the unified response of the subordinated group have drawn less attention. Using a qualitative content analysis of text-based data (newspapers, legal documents, press releases, scholarly works), the paper examines responses of two American Muslim organizations to the terrorism stereotype. The Council on American-Islamic Relations, a representative of the American Muslim mainstream majority and the American Islamic Forum for Democracy, a representative of ‘moderate’ Muslims have been consistently denouncing terrorism in all its forms. The unified response, voiced in the denouncement of terrorism, is explained through the depersonalization hypothesis of self-categorization theory, suggesting that an increase in saliency of the Muslim identity predicts greater perceived homogeneity of the group. Yet, beyond this unified response, there are profound differences in these organizations’ views, positions, and tactics toward combating the terrorism stereotype. Such variations depend on the perceived legitimacy of the source of negative stereotypes. Future research should study other stereotypical traits associated with Muslims in the US, to identify the existence of complex internal dynamics within various Muslim groups countering negative stereotypes.