The aim of this study is to show the effect of familiarity on two theories of social psychology namely 'social facilitation' and 'the fundamental attribution error'. Key theories in these areas of research such as those by Zajonc (1965) and Ross (1977) will be examined. The experiment had a between subjects design. Participants were tested at a simple hand-eye co-ordination task on their own, in the presence of a familiar observer and in the presence of an unfamiliar observer. Observers were asked to attribute the participants' performance to something. Ninety participants took part in the experiment. Thirty took the hand-eye co-ordination test, thirty acted as familiar observers and thirty acted as unfamiliar observers. Hand-eye co-ordination tests were presented on a personal computer and scores for all conditions were noted on an answer sheet for each trial. A set statement and question were used to elicit an attribution from all observers. Participants taking the test were given practice attempts before attempting a trial unobserved. Participants then attempted another trial observed by a stranger. Finally, participants were observed by a person familiar to them. All observers were asked for an attribution based on the participant's performance. A significant difference was seen in the performance of participants in the observed (familiar) condition compared to the observed (unfamiliar) condition (t = -3.796, df= 29, P < 0.05). No significant difference was seen in levels of fundamental attribution error between the familiar condition and the unfamiliar condition (x2 = 0.028, df= 1, ns). Conclusions drawn from the study are that familiarity lessens the effect of social facilitation significantly but does not lessen the effects of the fundamental attribution error significantly.