Two experiments investigated how young children and adults understand whether objects are "by" a landmark and remember their locations. Three- and 4-year-old children and adults were asked to judge whether several blocks were "by" a landmark. The blocks were arranged so that their absolute and relative distances from the landmark varied. Later, the blocks were removed, and participants were asked to place them in their original locations. All ages relied on relative distance between objects and a landmark when making "by" judgments; however, older children and adults showed systematic judgments. Relative distance also affected block placement, and systematicity increased across development. Children's understanding of the relative nature of "by" and their ability to remember locations precisely increased during the preschool years, indicating developmental changes in the adaptive combination of location cues for spatial language and memory. (Contains 6 figures, 4 tables and 3 footnotes.)