The present study explored young 5-6-year old children's design-based learning of science through building working physical systems and examined their evolving conceptions of water flow. Fifteen children in an experimental group individually built water-pipe systems during four sessions that included end-of-session interviews. In addition, they were interviewed with a pretest and posttest. The interviews consisted of near and far transfer tasks testing for the children's understanding of three physical rules of water flow and their combined application. To control for testing, maturation and familiarity with the interviewer, a control group was interviewed as well. It was found that through building, the experimental group children's understanding of the related physical rules grew substantially, showing a strong effect size. Moreover, the builders demonstrated budding abilities in coordinating two physical rules. Three distinct conceptual models regarding water flow were found: water can flow along a path disregarding height considerations; water can only flow downwards; and a coordinated view combining gravitational considerations and equilibration within connected vessels. The children's new understandings were found to be local, fragile and bound by developmental constraints. The control group but not the experimental group learned one of the physical rules in the far transfer tasks. The merits and limits of learning science through designing and constructing working physical devices are discussed.