This article examines how play is affected by computers and digital toys. Research indicates that when computer software targeted at children is problem-solving oriented and open-ended, children tend to engage in creative play and interact with peers in a positive manner. On the other hand, drill-and-practice programs can be quite boring and limit children's initiative and decision-making. Digital toys with computer chips installed that make the toys talk or act in certain ways also appear to have a mixed impact on play. Digital toys can serve as catalysts for new forms of play and can have a positive influence on the content of more traditional forms of play. Others contend that children's development can be negatively influenced by playing with digital toys, because they do not encourage creative play. Technological advances in toy manufacture bring significant opportunities and challenges to early childhood education. Parents and teachers need to know how to use technology to promote learning and to enrich children's play and to protect children from possible negative influences.