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Preschool-aged children are exposed to fantasy stories with the expectation that they will learn messages in those stories that are applied to real-world situations. We examined children’s transfer from fantastical and real stories. Over the course of 2 studies, 3½- to 5½-year-old children were less likely to transfer problem solutions from stories about fantasy characters than stories about real people. A combined analysis of the participants in the 2 studies revealed that the factors predicting transfer differed for the fantasy and real stories. These findings are discussed within the context of their implications for preschoolers’ developing boundaries between fantasy and real worlds.