Operationalization has been the focus of less research than many other methodological topics. In this article, we argue that considering operational decisions is particularly critical for those who study stratification, because measures of inequality often involve multiple layers of operationalization: researchers first decide how to assign individuals to social groups (e.g., race), which are then themselves used to construct measures of group-level differences and inequality (e.g., racial segregation). We provide examples of this by drawing on contemporary debates about how to operationalize social groups based on class, race, gender, and religion. Then we discuss three examples (religion, racial segregation, and family type) of second layer operationalization decisions, focusing on the consequences of operational decisions for research findings. We conclude by discussing the broader implications of operational decisions, focusing particularly on issues of power and applications for policy makers.