This study examined the extent to which actions of objects influence children's taxonomic categorization. Two types of action-based categories were examined: those in which the objects share similar actions; and those in which the objects have dissimilar actions. Perceptual features of the objects were dissimilar for all objects used in the study. Participating were 60 children--4, 5, and 6 years old--from private preschools and elementary schools in a southern urban city. Materials were two picture sets containing three similar-action-based objects, three dissimilar-action-based objects, and three distracter pictures. Children were asked to label pictures, make two groups, and explain why particular pictures had been grouped together. Results indicated that there were no age differences in overall sorting ability or in sorting accuracy for similar-action pictures. Six-year-olds were significantly more accurate in sorting dissimilar-action pictures than 4- and 5-year-olds, who did not differ from each other. Children with high sorting ability performed significantly better than those with low sorting ability. Within each sorting ability group, children were more accurate when sorting similar-action than dissimilar-action objects. For similar-action categories, children with low sorting ability offered more error explanations than any other type, while children with high sorting ability offered more event/taxonomic explanations than any other type. High ability sorters offered more event/taxonomic explanations than low ability sorters, and low ability sorters offered more error explanations than high ability sorters. For dissimilar-action categories, low sorters offered more error explanations than other types. High sorters offered more event/taxonomic explanations than other types. (KB)