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The influence on psychological differentiation exerted by exposure to industrial and urban environments and to formal schooling was investigated with the help of Story‐Pictorial EFT administered on 240 7–10‐year‐old children belonging to the Santhal tribe residing in and around an industrial city in Bihar. A 2 × 2 × 2 ANOVA performed on differentiation scores revealed significant main effects of industrial and urban exposures, and of schooling. Significant 3‐way interaction effect indicated that the impact of urbanization in the industrial and non‐industrial settings varied with exposure to formal schooling, and that the main effects in spite of their being statistically significant have to be taken with caution. Impact of the three factors on psychological differentiation is interpreted in terms of changes induced through acculturation that alter the experiential base of the individual as well as cultural characteristics of this environment.
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