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The current study examined if preschoolers' understanding of fantasy and reality are related to their learning from educational videos. Forty‐nine 3‐ to 6‐year‐old children watched short clips of popular educational programs in which animated characters solved problems. Following video viewing, children attempted to solve real‐world problems analogous to the problems in the videos and were asked to describe similarities between the video problems and the problems they solved in the lab. Additionally, children were tested for their understanding of which aspects of the clips and characters were realistic and possible and which were fantastical and impossible in the real world. Children were most likely to transfer solutions from clips that had moderate elements of fantasy or incorporated fantastical elements at moments that were relevant to solving the problem. Additionally, children's understanding of which elements of the clips were fantastical was related to their transfer. Findings are discussed in terms of their implications for the role of the fantasy understanding in children's learning from media. Highlights Over the preschool years, children come to understand what aspects of animated programs are and are not possible in the real world. Preschoolers learn problem-solving skills from animated shows when they have a clear boundary between fantasy and reality. Engaging with moderate fantastical content in animated programs can support abstract thinking.

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