The notions of class (varṇa) and caste (jāti) run through the Dharmaśāstra literature on all levels. They regulate marriage, economic transactions, work, punishment, penance, entitlement to rituals, identity markers like the sacred thread, and social interaction in general. Although this social structure was ideal in nature and not equally confirmed in other genres of ancient and medieval literature, it has nevertheless had an immense impact on Indian society. The chapter presents an overview of the system with its three privileged classes, the Brahmins, the Kṣatriyas, and the Vaiśyas, the fourth underprivileged class, the Śūdras, and, at the bottom of the society, the lowest so-called untouchable castes. It also discusses the understanding of human differences that lies at the center of the system and the possible economic and political motivations of the Brahmin authors of the texts.