Young children's knowledge of the practical use of objects was used to investigate whether children's actions indicate their understanding of the functional use of objects independent of their ability to verbally describe the appearance, reality, or function of the objects. Thirty-six children (12 two-year-olds, 12 three-year-olds, and 12 four-year-olds) were presented with six objects pairs, each pair containing objects similar in appearance but different in identity and function. Object pairs included illusory objects, toys, and pictures. Children were asked to describe the appearance, the real identity, and the function of each object, as well as show, using additional props, how the objects could be used. Four-year-olds were better at reporting the identity and describing the function of the objects than the 2- and 3-year-olds, but all the children performed similarly and significantly better when asked to describe the appearance and display the function of the objects. Analysis of error patterns on the appearance-reality questions (considered together) regarding the deceptive items in the object pairs showed that with age children made fewer phenomenism errors. However, the majority of children of all three ages who made phenomenism errors were nevertheless able to show the function of the same objects. The findings are discussed in relation to research on the development of object knowledge and children's ability to distinguish appearance and reality.