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Whereas conventional wisdom suggests that categorical and status distances can reinforce each other’s negative effect on interpersonal tie formation, it largely misses the possibility that, due to their double-edged nature, categorical and status distances may weaken each other’s negative impact. We argue that (1) identity distinction based on high-levels of status distance mitigates the concerns about identity ambiguity stemming from blending distant categories; (2) high-status actors have more leeway of boundary-crossing, which may be interpreted by the audience as innovation-seeking; and (3) status-based privileges are often domain-specific such that they are less likely to be leaked to a lower-status actor in a distant category, thereby reducing the high-status actor’s anxiety over status spillover. In support for our theory, analysis of music collaboration in the commercial music industry (2000-2015) shows that categorical (genre) distance reduced the likelihood of collaboration between the main artist and the featured artist, but this negative effect was weaker if the main artist had greater “status surplus” over the featured artist. In addition, the positive interaction of categorical and status distances was stronger if the main artist’s status was less volatile, which underlines the importance of the robustness of status-based identity for the positive interplay of these two fundamental forms of social structural differentiation.