Chinese script is often viewed as an exception to the processes of language learning in that it is presumed to be learned by rote. However, recent psycholinguistic investigations describing the formal and functional constraints of Chinese script have offered a new direction for a cognitive analysis of its acquisition. We investigated children's understanding of the formal and functional aspects of written Chinese in a task of judgment of orthographic acceptability and a creative spelling task. The formal constraint we examined was the fixed position of stroke patterns and their function as either a semantic radical (giving a clue to meaning) or a phonological component (giving a clue to pronunciation). The children (aged 4 to 9) attended either kindergarten or primary school in Hong Kong. Our results indicated that 6-year-olds could already use the positional rule to reject nonwords (which violate the formal constraint of position) as unacceptable, whereas pseudowords (which do not violate this constraint) were judged as acceptable. Significant effects of age and orthographic acceptability were observed. The task of creative writing replicated this trend and showed that, from age 6, the children were able to use semantic radicals to represent meaning. However, a more systematic use of phonological components as a clue to pronunciation was observed only among 9-year-olds. We conclude that learning to read and write in Chinese is not simply accomplished by the rote memorization of individual characters: rather, as children progress in learning, they develop an understanding of the underlying rules of written Chinese. Copyright © 1998 Cambridge University Press.