The present study examined children's and adults' categorization and moral judgment of truthful and untruthful statements. 7-, 9- and 11-year-old Chinese children and college students read stories in which story characters made truthful or untruthful statements and were asked to classify and evaluate the statements. The statements varied in terms of whether the speaker intended to help or harm a listener and whether the statement was made in a setting that called for informational accuracy or politeness. Results showed that the communicative intent and setting factors jointly influence children's categorization of lying and truth-telling, which extends an earlier finding (Lee & Ross, 1997) to childhood. Also, we found that children's and adults' moral judgments of lying and truth-telling were influenced by the communicative intent but not the setting factor. The present results were discussed in terms of Sweetser's (1987) folkloristic model of lying. (Contains 3 figures and 2 tables.)