This thesis aims to explore how some young Australian children construct their racialised ideas of difference and social relations. It adopts a qualitative method of inquiry and is based on face-to face, semi-structured interviews with a small sample of twelve Western Australian children aged three, five and seven years. The study adopts a relatively recent perspective on children, within which they are viewed as having an active role in their own learning process and as possessing a certain level of competence (Lloyd-Smith & Tarr, 2000; James & James, 2004) that allows them to “comprehend, process and articulate their needs and experiences” (Connolly, 1996, p.172). The study also adopts a perspective of the multiplicity of the forms of racism (Hall, 1986; Miles, 1989, 1993) and their dynamic, contingent nature, specific to different political and social contexts. Within this understanding children are viewed not just as passive recipients of racist discourses, but as active agents who, in order to make sense of their social world, strive to deal with the often contradictory nature of information received in relation to the racial Other (Rizvi, 1993a; Connolly, 1996). Bronfenbrenner’s ecological perspective on human development adopted by this study, allows us to position the development of children’s racialised thinking within the specific contexts of immediate environments (Microsystem), where children experience and create reality (Bronfenbrenner, 1979). At the same time, however, it helps us to see how the experiences within the child’s environments are influenced, if not determined, by the broader social processes and institutions (Exosystem), which in many aspects reflect the ideologies (Macrosystem) of racism within Australian society (Jayasuriya, 1999). The study argues that young Australian children’s racialised construction of difference needs to be addressed, possibly through the development of curricula and programs with an anti-racist rather than multicultural focus. Such curricula have a potential to provide children with opportunities to look critically at the dangers of racisms and to challenge everyday racist assumptions. Further qualitative research is needed to unearth the complexities of young Australian children’s racialised thought.