In preschool settings, children challenge the adult-initiated rules in many ways during their play activities with peers. This ethnographic study with children aged 3-5 years was built on Corsaro's sociology of childhood construct that views children as agents and active participants in preschool society. The study is conducted in two preschools in Iceland, and explores children's perspectives of adult-initiated rules in their preschool settings and how they challenge these rules in their play activities. Children's perspectives were explored by video-recording their play activities and inviting the children to watch and discuss the recordings. The children reported how they interactionally managed the adult-initiated rules in their preschool settings. The findings indicate the different strategies used by the children to challenge these rules, which were often related to who could take part in the play. The implication of the study is a better understanding of the complexity of rules within and around children's play in peer cultures. Such understanding offers educators awareness of how these rules influence children's participation in play activities.