Highlighting pertinent research in the area of young children's development of humor, this paper reviews four areas from a cognitive-developmental perspective: (1) humor as a cognitive process, (2) humor and the developmental process, (3) research on young children's humor, and (4) humor and early childhood education. First, the structural properties of incongruity and resolution are discussed in terms of the forms that humor can take as a cognitive process. The stages involved in humor processing are examined in relation to the structure of humor and the cognitive status of the recipient. Secondly, humor is viewed as a developmental process which reflects underlying cognitive changes. General cognitive prerequisites for incongruity humor are defined and the stage at which young children first are capable of understanding comic incongruity is identified. Thirdly, research is reviewed and findings summarized in the areas of laughter-provoking situations, cognitive mastery, moderately novel humor stimuli, and structural aspects of humor. Lastly, the role of humor in four areas of early childhood education are explained: humor as a motivating factor; the value of humor in spontaneous play activities; the role of humor in the learning process; and the types of humor most appropriate for young children. Examples of children's jokes, riddles, etc. are used to illustrate important concepts throughout the paper. An 11-page reference list is appended. (DST)