There is currently debate about the emergence of children's ability to reason about artifacts by reference to their intended design. We present two studies demonstrating that, while 3-year-olds have emerging insights, 4-year-old children display an explicit, well-rounded, adult-like understanding of the way design constrains an artifact's physical structure. Study 1 examined children's recognition that designers generally create artifacts with structures that are optimally efficient for achieving their intended function. Three- and 4-year-olds explored pairs of objects--one physically optimal and one suboptimal for a given function--and judged which one had been designed for the purpose. Despite both age groups recognizing the relative physical optimality of the objects, only 4-year-olds judged the optimal tool as designed for the function. Study 2 examined children's recognition that designers generally create artifacts with structures that primarily subserve a single intended function rather than other functions. Participants explored pairs of objects that were equally physically optimal for a given purpose; however, one object had additional salient features suggestive of an alternative function. Both 3- and 4-year-olds recognized the equivalent physical optimality of the objects. Both also showed evidence of explicit design understanding, identifying the more physically specific tool as created for the function. Implications for children's broad functional attributions to artifacts and natural phenomena are discussed. (Contains 2 figures, 1 footnote and 3 tables.)