Abstract The question addressed here is whether there is a systematic relationship between the internal structure of syntactic phrases and their distribution in the clause. To account for the internal coherence of syntactic phrases, their endocentricity, I develop the notion of 'extended projections' in two ways. First, evidence from two constructions of German and Dutch argues that in addition to lexical heads and functional heads, also semi-lexical heads must be introduced. The notion of categorial identity, which states that the syntactic nodes connecting the lexical and functional heads within an extended projection with the phrasal node must all be of the same category type, is shown to hold for semi-lexical heads as well. Second, the notion of 'extended projection' will be modified to accommodate the fact that prepositional elements can often be inserted within an extended projection. This exceptional status of prepositional elements is reminiscent of the fact that prepositional phrases are arguably the most flexible phrases in terms of their distribution. In earlier work, I had suggested that this fact could be expressed in terms of a constraint, the Unlike Feature Constraint, which was formulated in terms of repulsion between the positive values of the categorial features: a [+N/V] head does not tolerate a [+N/V] phrase in its immediate domain. Categorial identity is now interpreted as the mutual attraction of the positive categorial feature values: we have attraction within, but repulsion across phrasal categories. And in both cases, prepositions are the neutral element. This idea leads to a unified principle, the Law of Categorial Feature Magnetism.