Much of the previous research on children's understanding of intentions confounded intentions with desires. Intentions and desires are different, in that a desire can be satisfied in a number of ways, but an intention must be satisfied by carrying out the intended action. Children 3 through 7 years of age and adults were presented with situations in which intentions were satisfied but desires were not, or vice versa, in a story-comprehension task (N = 71) and a target-hitting game (N = 45). Although 3- and 4-year-olds were unable to differentiate desires and intentions consistently, 5- and 7-year-olds often matched the adult pattern. Younger children's difficulties in understanding intentions are discussed in terms of their use of a desire-outcome matching strategy and the representational complexities of intentions.