The goal of these studies was to investigate how preschool children use gender-based reasoning in making judgments about toy preferences for themselves and for others. In Studies 1 and 2, children (n = 22, n = 71) were shown unfamiliar, non-sex-typed toys and asked to rate how much they, other girls, and other boys would like each toy. As expected, children made gender-based inferences: "What I like, children of my sex will also like, and children of the other sex will not like." Study 3 was designed to assess how children use gender-based reasoning to make decisions about attractive and unattractive toys when they are given gender labels. Children (n = 91) were shown unfamiliar toys varying in attractiveness that were given explicit gender labels (e.g., "this is a toy girls really like") or no label. With a different experimenter (to avoid demand characteristics), children rated their own and others' liking of the toys. Children used gender labels to guide their own preferences and their expectations for others. Even with very attractive toys, children liked toys less if they were labeled as being for the other sex, and expected other girls and boys to do the same. The role of gender-based reasoning in cognitive theories of gender and on children's play preferences is discussed.