Groups allow you to sort your references based on any criteria you choose. This is great for dividing items up based up subject, class, project, or any way you like. This is especially helpful once your library grows larger and references become harder to spot at a glance.
Right-click (Ctrl+click for Mac) in the "My Library" area on the left side of the screen, below Trash - OR - go to "Groups" in the tool bar
Select "Create Group"
Give your group a name that is meaningful to you
You can add references to each group by dragging and dropping from the All References list
Note - PC is shown but menus are the same for Mac