Research on the conformity-distinctiveness tradeoff in family firms is divided. Examining the product innovations of Spanish manufacturing firms between 1998 and 2012, we hypothesize that family and nonfamily firms conform selectively and are driven by different motivations. Family firms align with their closest peers to avoid social losses while nonfamily firms conform to firms with different attributes to pursue social gains. Moreover, propensity to conform leads to more substantive organizational responses in family firms. We contribute to understanding how family firms navigate the conformity-distinctiveness trade-off, unveil the cognitive dimension of conformity and address the puzzling evidence on family firm innovation.