The present study investigates what children of various ages think about concealing or revealing the wrongdoing of a friend in a hypothetical conflict between honesty to parents and loyalty to a friend. The study also examines how children's reasoning was affected by the expectation of parental punishment. A total of 200 children (20 boys and 20 girls aged 5, 6, 8, 10, and 12; 100 German and 100 Australian) were asked in semistructured interviews what they thought about stories in which the protagonist confessed a misdeed to a friend who, in turn, revealed this to his mother. The analyses showed that the majority of 5- and 6-year-olds advocated obedience to parents, some of them because they thought the transgressor deserved punishment. Older children tended to favor secrecy, in order to spare their hypothetical friend parental chastisement. When older children advocated confession, it was generally for tactical reasons (diminution of punishment) or with "therapeutic" motives (relief of conscience by talking about the deed). Issues of the appropriateness of punishments, of making good for the wrongdoing and the role of friends as moral authorities, took on a greater importance with increasing age. The strategies of the children reflect developmental changes in the concept of punishment (from retaliation to explanation) and in the concept of friendship (older children emphasizing loyalty obligations). German children were more likely than Australian children to hide wrongdoing from parents. (Contains 3 tables of data and 18 references.) (RS)