Group differences based on giftedness and achievement were examined in acquisition and generalization of a strategy for solving verbal and figural analogies. The strategy involved making a sentence that captured the relationship between a pair of words and then applying that sentence to a third item. A total of 162 high-achieving gifted, underachieving gifted, high-achieving nongifted, and average-achieving nongifted children in seventh and eighth grades were assessed on their performance at baseline, training, proximal transfer, and distal transfer. The strategy training improved performance, raising correct responses (out of 10) from 6.2 to 6.9. Each of the four groups differed significantly in analogy solving accuracy. Group differences in performance were paralleled by group differences in strategy use. The high-achieving gifted were more spontaneously, frequently, and successfully strategic, and were the only group to increase performance at distal transfer. The underachieving gifted showed qualitative deficits in their strategic functioning. (Eight references) (JDD)