According to Markman and Wachtel (1988), children assume that words stand for mutually exclusive object categories, and so each object must have only one category label. This study examined whether children suspended their use of this assumption and interpreted a given novel label as referring to a familiar object; that is, an object whose name they already knew in their mother tongue (Japanese), when they were informed that the label came from a foreign language (English). The result showed that five-year-olds accepted the novel English label for a familiar object, while the three-year-olds and four-year-olds were not willing to accept it. To explain such result, the following hypotheses were considered. Children younger than 5 used mutual exclusivity to interpret a novel English label:(1) because the limitation of their capacity (Case, 1972) did not allow them to suspend the use of mutual exclusivity effectively, even if they knew English;(2) simply because only a few of them knew English. As a result, four-year-olds who knew English were found to suspend their use of mutual exclusivity when interpreting English labels. The second hypothesis was thus supported.