Research has long emphasized that categories play a central role in audiences’ evaluation of organizations and offerings, but scholarship only recently started to explore organizations’ strategic categorization efforts. In this paper, we delve into the influence of a category's coherence on the likelihood of its members’ category exits–the deliberate decision to disaffiliate from the category. We integrate elements from category research, which posits that heightened category coherence offers evaluative benefits to its members but also subjects them to more restrictive audience expectations, with insights from research on strategic responses to conformity pressures. Using the Airbnb marketplace as our empirical context, we posit category exits as a strategic action that decision-makers deploy to sidestep a category’s restrictive conformity pressures and outline two contrasting mechanisms by which category coherence can simultaneously increase and reduce the likelihood of category exits. Our longitudinal study of a panel of 110,069 Airbnb listings reveals that the relationship between category coherence and category exits follows an inverted U-shape, where Airbnb hosts are significantly more inclined to exit a category that has moderate coherence compared to one with very low or very high coherence.