This chapter from a longer work concerns the ability of children to solve arithmetic word problems. The studies reviewed suggest that, with age, children's improved ability to solve word problems primarily involves an increase in the complexity of conceptual knowledge required to understand the situations described in those problems. Considered in the various sections are conceptual and procedural knowledge in problem solving, approaches to analyzing knowledge in problem solving, a review of research on children's word problem solving, a theory of the knowledge required to solve word problems, the locus of improvement in problem-solving skill, stages of conceptual knowledge, related analysis of conceptual understanding in problem solving, and a summary discussion. (MNS)