Seventy-two children participated in a study of children's knowledge about and evaluation of lies and truths. Twelve boys and 12 girls were randomly drawn from each of three ages: 4-, 7- and 10-year-olds. The children were presented with six vignettes in which the story character either lied or told the truth about having committed a misdeed. After each vignette, they were asked whether the statement was a lie or a truth (definition), how certain they were about their categorization of the statement, and to rate the goodness and badness of the statement (evaluation). Seven- and 10-year-old children classified all false statements as lies and true statements as truths, whereas 4-year-olds correctly classified 88 percent across both statement types. They were equally accurate in their classification of lies (89 percent) and truths (87 percent). All children appreciated the seriousness of lying; lies were rated more negatively than truths. However, 4-year-olds were less likely to appreciate the goodness of truth-telling over lying than the two older age groups. On the basis of this study, the article concludes that 4-year-olds have sufficient understanding of lying and truth-telling competence to participate effectively in the legal system. Figures, references