This dissertation examines children's recognition and understanding of persuasion. It concentrates on developmental changes and contextual differences in detection of persuasive strategies and the purpose of persuasive claims. A study is presented in which 5- to 6-year-old and 7- to 8-year-old children (N = 108) completed a novel persuasion task and a measure of social cognition adapted from previous research (i.e., interpretive theory of mind; ITOM). In the persuasion task, children heard claims that varied in their degree of accuracy and valence. Following each claim, children were asked questions to measure their recognition of the persuasive strategies used in claims (exaggeration and omission), as well as their understanding of the purpose of claims. There were two between-subjects conditions for the persuasion task: children either did or did not hear reminders about the items prior to hearing each persuasive claim. Lastly, the ITOM measure examined children's ability to recognize that some information can be ambiguous. The main findings follow. First, related to understanding persuasive strategies, children of both age groups had a good understanding of negative exaggeration, recognizing that negative persuasive claims were negatively exaggerated and informative claims were not. However, for positive exaggeration, older children had a more sophisticated understanding than younger children, who often endorsed that both informative and positive persuasive claims were positively exaggerated. Furthermore, both age groups had trouble recognizing when information was left out (i.e., omission). Second, turning to understanding the purpose of persuasive claims, despite developmental improvements in children's ability to accurately categorize the purpose of persuasive claims, even older children were not performing perfectly: they frequently endorsed that the purpose of persuasive claims was benign. Finally, there was a link between categorizing the purpose of persuasive claims and ITOM: controlling for age, children with lower ITOM scores were more likely to categorize persuasive claims absolutely, as tricks. Findings suggest that children, particularly younger children, may be especially vulnerable to claims that are positively exaggerated, and that it may be difficult for children to recognize the reasons someone might present exaggerated information.