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This paper deals with the question whether the schizophrenic thinking of the adult, as characterized by hallucinations, delusions and misinterpretations, is met with in the phantasy and play of normal young children. The author, reporting a study of nineteen normal children, age two to five, and three schizophrenic children varying in age from eight to fourteen, finds that normal young children engaged in make-believe or phantasy play usually know that it is make-believe and moreover that they are willing, and often eager, that the observer should realize this. On the other hand, the schizophrenic children presented auditory and visual hallucinations and misinterpretations and the behaviour characteristic of these phenomena. Occasionally, upon repeated questioning as to the reality value of the phantasy, the child would persistently evade answering. On other occasions, the child would maintain and apparently believe that the phantasied situation was real. 'Pseudo-hallucinations are dependent upon the nature and intensity of the emotion experienced by the child rather than upon any characteristics specific to child thinking …'