The purpose of this research was to examine young children's psychological prosess during production stories. At first, two goals were studied in experiment I: the first goal was to find out what effects a story from the daily life or a fancy story, might have on the performance of story production ; the second goal was to clarify developmental changes in children's storyproduction. Eighty 4-year-old and 5-year -old children were divided into 2 homogeneous groups (20 Ss each) at each age level, and assigned to one of two conditions: i. e. a daily life story or a fancy story. Each child heard twice a story providing the information of settings and protagonist's goals, and was asked to complete the story. In order to collect adults' normative protocols, 185 college students were assigned to one of the two conditions randomly. Each story protocol was analyzed in terms of (1) the number of idea units,(2) the coherent connections between episodic chunks, and (3) the story structure according to the narrative categories (exposition, complication, or resolution) developed by Kintsch (1977). The main findings were as follows: First, in terms of consistence and coherence of the story structure, the performance of 4-year-old children were much poorer than 5-year-old children under a fancy story condition. Thus, the facility of production of stories seemed to depend on the function of available world and procedural knowledge acquired through experiences. Second, adults protocols of daily life stories were put into five types of story structures, and the fancy stories were divided into eight types. All types were identified in children's protocols and closely matched the adults data. But there were significant differences between children and adults, i. e. adults often produced complete structures made of more complex and elaborated episodes than children. These suggest that first, children have some foundamental logical structures from early childhood; second, the facility with which individuals can choose and use their knowledge on the world and itsprocess may increase the progress. Next, the two points were investigated in experiment II; the first point was to clarify how children organize stories, i. e. what strategies they use in story construction; the second point was to confirm the results of the experiment I. One hundred and twenty 4-year-old and 5-year-old children were divided into 3 homogeneous groups (20 Ss each) at each age level, and assigned to one of three conditions; H gr.(was presented ten sentences with a fancy story beginning and a happy endingsentence), U gr.(was presented the ten sentences and an unhappy endingsentence), and C gr.(was presented the ten sentencesonly). The task of H and U conditions was to complete the story byconnecting the beginning and the end, and that of C condition was to be the same as experiment I. The main results were as follows: First, 5-yearold children could complete coherent stories in any conditions, but 4-year-old children could not generate coherent stories under H and U conditions. This result was interpreted in terms of the development of planning competence in story construction, i. e. this suggests that 5-year-old children can use either global plot plan strategies or local plan (what-next) strategies, but 4-year-old cannot use plot plan strategies. Second, exclusive of uncodable protocols of 4-year-old, and other protocols were identified with eight types of story structures. This confirmed the second finding of experiment I.