This paper demonstrates how the collaborative and sequential unfolding of a story ties into the constitution of a membership categorization device which it have glossed as ‘us and them’. The data come from a focus group activity where first and second generation immigrants to Denmark have been asked to discuss their situation in Denmark. Using Ethnomethodological Conversation and Membership Categorization Analysis, the paper presents one story which involves a story-teller and his family and an elderly Danish couple living in the same block of flats. In the telling of the story, co-participants align and affiliate, and disalign and disaffiliate, at sequentially relevant junctions. The paper will argue that not only do such phenomena indicate listenership and possible agreement to the moral of the story in its telling, but also to the morally implicative categorical work involved in the story’s telling.