The present study tests a model of category effects upon stimulus estimation in children. Prior work with adults suggests that people inductively generalize distributional information about a category of stimuli and use this information to adjust their estimates of individual stimuli in a way that maximizes average accuracy in estimation (see Huttenlocher, Hedges & Vevea, 2000). However, little is known about the developmental origin of this cognitive process. In the present study, 5- and 7-year-old children viewed stimuli that varied in size and reproduced each from memory. Consistent with the predictions of a Bayesian model of category effects on estimation, responses were adjusted toward the central value of the stimulus distribution. Additionally, the dispersion of the stimulus distribution affected the pattern of bias and variability of responses in a way that is predicted by the model. The results suggest that, like adults, children use categories for increasing average accuracy in estimating inexact stimuli.