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This paper investigates the mutual perceptions and misperceptions between Europe and the Arab-Islamic world. Based on a sociological theory of collective identity formation, a typology and set of hypotheses are developed in the first section concerning the relations between countries and cultures in the world; these are seen as being dependent on inequality in their level of socio-economic development, and on the similarity or difference of their culture and their political systems. In the second and third section, these principles are applied to an analysis of the self-concepts and the mutual perceptions between Europe and the Arab-Islamic world. Here, it is first investigated whether fundamental differences exist in basic value orientations between Europe on the one hand, and Islam and the Arabic world on the other, and in the value orientations of Christians and Muslims in two selected countries. In the third section, the mutual perceptions of these two culture areas are investigated. It is shown that--despite a lack of fundamental differences in value orientations--significant misperceptions exist, particularly of the Arab-Islamic culture and societies in Europe. They are related to colonial history, religious-cultural differences, and inequalities in levels of development. Further reasons for the misperceptions and perspectives for their correction after the terrorist attack in New York in 2001 are outlined in the final section. [ABSTRACT FROM AUTHOR]