The present study examines 5- to 8-year-old children's relation reasoning in solving matrix completion tasks. This study incorporates a componential analysis, an eye-tracking method, and a microgenetic approach, which together allow an investigation of the cognitive processing strategies involved in the development and learning of children's relational thinking. Developmental differences in problem-solving performance were largely due to deficiencies in engaging the processing strategies that are hypothesized to facilitate problem-solving performance. Feedback designed to highlight the relations between objects within the matrix improved 5- and 6-year-olds' problem-solving performance, as well as their use of appropriate processing strategies. Furthermore, children who engaged the processing strategies early on in the task were more likely to solve subsequent problems in later phases. These findings suggest that encoding relations, integrating rules, completing the model, and generalizing strategies across tasks are critical processing components that underlie relational thinking.