The current article examines how societal stereotypes might form and evolve through a process of cumulative cultural evolution as social information is repeatedly passed from person to person. Social psychology research has done much to inform our understanding about the substantial influence stereotypes exert on us as individuals and on our society, yet comparatively little is known about how society's pools of stereotype knowledge form and how they evolve. Here, we review evidence that as social information is repeatedly passed from person to person, there is a continuous cycle of stereotype formation and evolution that is driven by constraints and biases in (a) observations of the social environment, (b) cognitive representations of the social environment, and (c) social transmissions of cognitive representations of the social environment. We suggest the reason stereotypes exist and persist is because they are perfectly adapted for human cognition and the reason they are perfectly adapted for human cognition is because they are the cumulative product of human cognition