Tool making evidences intelligent, flexible thinking. In Experiment 1, we confirmed that 4- to 7-year-olds chose a hook tool to retrieve a bucket from a tube. In Experiment 2, 3- to 5-year-olds consistently failed to innovate a simple hook tool. Eight-year-olds performed at mature levels. In contrast, making a tool following demonstration was easy for even the youngest children. In Experiment 3, children's performance did not improve given the opportunity to manipulate the objects in a warm-up phase. Children's tool innovation lags substantially behind their ability to learn how to make tools by observing others.