Abstract.  Through the analysis of Hungarian politics, this article demonstrates how parties become embedded in the social, cognitive and emotive structures of societies. The role of agency in cleavage formation is addressed, with a special emphasis on the mechanism through which political parties structure their environments. Next to the popularization of conflict perceptions and the consolidation of camp identities, the development of a more elaborate and segmented organizational structure is identified as an integral part of the process of cleavage formation. Such a structure enables parties to forge coalitions among previously separate social groupings and combine group interests into packages large enough to overcome institutional thresholds of power. The findings indicate that parties are potentially able to cross cleavage lines, re-structure relations within the party system and create new associations between party preferences, socio-structural categories and attitudes. Furthermore, parties seem to be able to alter the relationships between psychologically rooted attitudes and social categories. The study also shows, however, that deep-seated socio-cultural divides limit the power of agency even in new democracies.