The language of preschool children is charmingly creative, suggesting that from an early age children can use their language flexibly. Even very young children appear to stretch words beyond their conventional meanings, and they create new words when theirs are insufficient. One compelling question, then, is how a language-user discovers that words can be used in these ways. Eighty-two children and 39 adults participated in an elicited production task, in which they viewed objects labeled with an incorrect compound and provided more appropriate labels. Children as young as 3 years produced intentional, appropriate metaphors incorporated into compound nouns, although significant developmental differences were found among all ages. The metaphoric compounds were generally produced in correct modifier+head order, suggesting that children distinguish between literal and metaphoric labels. In four other studies, 96 children and 32 adults participated in comprehension tasks that assessed subjects' ability to identify the referent of a metaphoric compound (e.g., a fan-shell, a fish-plate) from arrays that include salient distractor items (e.g., a fan, a fish, a shell and a fan). Results indicated that even the youngest children interpreted the compounds metaphorically rather than literally, although developmental differences were present. These studies demonstrate that preschool children can produce and comprehend metaphoric compounds to label objects that resemble others in various ways. Thus, metaphoric language in preschoolers is not limited to single-word renamings. Taken together, the production and comprehension data provide evidence that preschool children have an early, fairly well-developed ability to use and understand others' metaphoric language, but that significant developmental change occurs between the ages of 3 and 5 as well as beyond age 5. The paper concludes with a general discussion of metaphoric language and semantic flexibility. (Dissertation Abstracts)