This paper investigates young children's knowledge of scalar implicatures and downward entailment. In previous experimental work, we have shown that young children access the full range of truth-conditions associated with logical words in classical logic, including the disjunction operator, as well as the indefinite article. The present study extends this research in three ways, taking disjunction as a case study. Experiment 1 draws upon the observation that scalar implicatures (SIs) are cancelled (or reversed) in downward entailing (DE) linguistic environments, e.g., in the scope of negation (Chierchia, 2000). Experiment 2 was designed to determine if scalar implicatures are used by children, like adults, to influence the interpretation of disjunction in non-DE contexts, yielding an implicature of exclusivity for disjunction. Whereas adult controls always rejected assertions of the form A or B in positive (non-DE) contexts in which assertions of the form A and B were also true, many children accepted assertions with disjunction in such contexts. To provide an interpretation to the findings from Experiment 2, a new experimental technique was devised and used in Experiment 3. The new technique presents pairs of assertions to children, who are asked to judge which assertion is a ‘better’ description of the context. The findings from Experiment 3 demonstrated children's awareness that A and B is more informative than A or B in positive contexts, where both statements are true. Taken together, the findings of Experiments 2 and 3 are compatible with the view that some children lack the computational resources to apply scalar implicatures when a single assertion is presented alone (see Reinhart, 1999).