A neuropsychological theory is proposed that assumes category learning is a competition between separate verbal and implicit (i.e., procedural-learning-based) categorization systems. The theory assumes that the caudate nucleus is an important component of the implicit system and that the anterior cingulate and prefrontal cortices are critical to the verbal system. In addition to making predictions for normal human adults, the theory makes specific predictions for children, elderly people, and patients suffering from Parkinson's disease, Huntington's disease, major depression, amnesia, or lesions of the prefrontal cortex. Two separate formal descriptions of the theory are also provided. One describes trial-by-trial learning, and the other describes global dynamics. The theory is tested on published neuropsychological data and on category learning data with normal adults.