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Three studies explored whether and when children could categorize objects on the basis of a novel underlying causal power. To test this we constructed a ‘blicket detector,’ a machine that lit up and played music when certain objects were placed on it. First, 2-, 3- and 4-year-old children saw that an object labeled as a ‘blicket’ would set off the machine. In a categorization task, other objects were demonstrated on the machine. Some set it off and some did not. Children were asked to say which objects were ‘blickets.’ In an induction task, other objects were or were not labeled as ‘blickets.’ Children had to predict which objects would have the causal power to set off the machine. The causal power could conflict with perceptual properties of the object, such as color and shape. In an association task the object was associated with the machine's lighting up but did not cause it to light up. Even the youngest children sometimes used the causal power to determine the object's name rather than using its perceptual properties and sometimes used the object's name rather than its perceptual properties to predict the object's causal powers. Children rarely categorized the object on the basis of the associated event. Young children also sometimes made interesting memory errors — they incorrectly reported that objects with the same perceptual features had had the same causal power. These studies demonstrate that even very young children will easily and swiftly learn about a new causal power of an object and spontaneously use that information in classifying and naming the object.