What happens when children have formed an impression of a peer based on prior gossip, but later learn from direct observation that the gossip is untrue? We interviewed seventy 5‐ and 6‐year‐old children in Zhejiang, China. They first heard conflicting positive and negative gossip about an absent third party, and subsequently learned which piece of gossip was true. Initially, both 5‐ and 6‐year‐old children tended to endorse the positive rather than the negative gossip. However, when they learned about the inaccuracy of the positive gossip based on their own direct observation, 6‐year‐old children subsequently doubted it, whereas 5‐year‐old children showed no such shift. Taken together, the results show that when children decide what gossip to believe, they are initially swayed by its valence but with age they increasingly weigh gossip in relation to their own direct observation.