Young children often struggle with referential communications because they fail to compare all valid referents. In two studies, we investigated this comparison process. In Study 1, 4–7 year-olds (N = 114) were asked to categorize pairs of objects according to their similarities or differences, and then identified a unique quality of one of the objects by responding to a referential question. Children found it easier to judge the differences between objects than similarities. Correct judgments of differences predicted accurate identifications. In Study 2, 4–5 year-olds (N = 36) again categorized according to similarities or differences, but this time were asked for verbal explanations of their decisions. Recognition of differences was easier than recognition of similarities. Explanations of errors were either: (a) ambiguous; (b) color error: (c) thematic (creative imaginative explanations). Children offered thematic explanations when they failed to recognize similarities between objects, but not for errors of difference.