In a blink of an eye, an expert birdwatcher can distinguish a Bachman warbler from a Tennessee warbler or a car expert can discern subtle differences between a '55 and a '56 Chevy. Consistent with these observations, the behavioural evidence indicates that experts identify objects in their domain of expertise at a more specific, subordinate level of categorization than novices. Although the performance of real-world experts has been fairly well characterized in the literature, less is known about how perceptual expertise unfolds over time and what its implications are for new learning. In this talk, I will discuss experiments that examine the acquisition and consequences of expertise employing behavioural measures and event-related potentials. In these experiments, participants learned to classify ten varieties of wading birds and ten varieties of owls at either the subordinate, species (e.g., "white crown heron," "screech owl") or family ("wading bird", "owl") level of classification. Pre- and post-training performance was measured in a "same/different" discrimination task in which participants judged whether pairs of bird stimuli belonged to the "same" or "different" species. Participants trained in species level discrimination demonstrated greater transfer to novel exemplars and novel species categories than participants trained in family level discrimination. A corresponding shift was found in the participant's electrophysiological response to familiar and new bird stimuli. Specifically, 250 msec after stimulus onset, stimuli learned at the species level elicited an enhanced negative deflection in posterior recording channels (N250) relative to stimuli learned at the family level. Mirroring the behavioural findings, the N250 generalized to new images of familiar subordinate level species and novel species. Collectively, the behavioural and neurophysiological evidence indicates that the expert has an advantage over the novice not only regard to the recognition of objects from familiar expert categories, but also in the acquisition of new object categories in their domain of expertise.