This study is a grounded theory describing the leadership experiences of four- and five-year-old preschool and kindergarten children in a school environment. Nine children were observed participating in learning and play in a combined preschool and kindergarten program. Using qualitative grounded theory methodology, a theory regarding young children's leadership interactions was constructed. The theory proposes that leadership events and roles are a result of the dynamic fit between the individual child and the environmental needs and expectations of the leadership experience, overlaid by decision making enacted by all members throughout the event. This study suggests that educators should focus on building foundations of children's leadership in early childhood classroom communities through the educator's reflective exploration of the environment as it informs social interactions, nurturing diverse skill sets in all children, and examining decision making with children when addressing leadership learning.