Children's reasoning about lying and truth-telling was examined among participants ages 7-11 (total N = 181) with reference to conflicts between being honest and protecting the feelings of others. In Study 1, participants showed different patterns of evaluation and motivational inference in politeness contexts vs. transgression contexts: in politeness contexts, they rated lie-telling more favorably and were far more likely to assume that motives were prosocial. In Study 2, participants evaluated lie-telling more positively and truth-telling more negatively in politeness contexts, especially when they focused on the implications of the statements for others instead of whether the statements were true or false.