There is an active debate within the field of phonology concerning the cognitive status of substantive phonetic factors such as ease of articulation and perceptual distinctiveness. A new framework is proposed in which substance acts as a bias, or prior, on phonological learning. Two experiments tested this framework with a method in which participants are first provided highly impoverished evidence of a new phonological pattern, and then tested on how they extend this pattern to novel contexts and novel sounds. Participants were found to generalize velar palatalization (e.g., the change from [k] as in keep to [t⌢∫S] as in cheap) in a way that accords with linguistic typology, and that is predicted by a cognitive bias in favor of changes that relate perceptually similar sounds. Velar palatalization was extended from the mid front vowel context (i.e., before [e] as in cape) to the high front vowel context (i.e., before [i] as in keep), but not vice versa. The key explanatory notion of perceptual similarity is quantified with a psychological model of categorization, and the substantively biased framework is formalized as a conditional random field. Implications of these results for the debate on substance, theories of phonological generalization, and the formalization of similarity are discussed.