We found that judgments of a perceptually ambiguous social category, sexual orientation, varied as a function of a perceptually obvious social category, race. Sexual orientation judgments tend to exploit a heuristic of gender inversion that often promotes accuracy. We predicted that an orthogonal social category that is itself gendered, race, would impact both sexual orientation categorizations and their accuracy. Importantly, overlaps in both the phenotypes and stereotypes associated with specific race and sex categories (e.g., the categories Black and Men and the categories Asian and Women) lead race categories to be decidedly gendered. Therefore, we reasoned that race categories would bias judgments of sexual orientation and their accuracy because of the inherent gendered nature. Indeed, both gay and straight perceivers in the United States were more likely to judge targets to be gay when target race was associated with gender-atypical stereotypes or phenotypes (e.g., Asian Men). Perceivers were also most accurate when judging the sexual orientation of the most strongly gender-stereotyped groups (i.e., Asian Women and Black Men), but least accurate when judging the sexual orientation of counter-stereotypical groups (i.e., Asian men and Black Women). Signal detection analyses confirmed that this pattern of accuracy was achieved because of heightened sensitivity to cues in groups who more naturally conform to gendered stereotypes (Asian Women and Black Men). Implications for social perception are discussed.