In 2 studies, the authors examined the development of the relationship between inductive reasoning and visual recognition memory. In both studies, 5- to 6-year-old children and adults were shown instances of a basic-level category (dogs) followed by a test set containing old and new category members that varied in their similarity to study items. Participants were given either recognition instructions (memorize study items and discriminate between old and new test items) or induction instructions (learn about a novel property shared by the study items and decide whether it generalizes to test items). Across both tasks, children made a greater number of positive responses than did adults. Across both age groups, a greater number of positive responses were made in induction than in recognition. The application of a mathematical model, called GEN-EX for generalization from examples, showed that both memory and reasoning data could be explained by a single exemplar-based process that assumes task and age differences in generalization gradients. These results show considerable developmental continuity in the cognitive processes that underlie memory and inductive reasoning. (Contains 2 tables, 3 figures and 2 footnotes.)