Combining research in political geography and social psychology, this article investigates lay theories of “place effects”—that is, ordinary citizens' beliefs about the effects that urban or rural places have on the individuals who live in them. We do so using a novel survey vignette embedded in a large‐scale survey of the Canadian public. Our results suggest that (1) citizens see rural identities as less malleable than urban identities, (2) lay theories of place effects depend on citizens' own place identities, and (3) lay theories of place effects are stronger for nonpolitical than for political place‐based characteristics. We also find that lay theories of place effects are associated with individual‐level characteristics that are connected to cosmopolitan‐communitarian divides, such as ideology and postsecondary education. We conclude with a discussion of the implications of our findings for the growing literature on urban–rural divides and for research on citizens' implicit theories of places and their political consequences.