Four-year-olds, 6-year-olds, and adults were asked to make judgments about the reality status of four different types of machines: real machines that children and adults interact with on a daily basis, real machines that children and adults interact with rarely (if at all), and impossible machines that violated a real-world physical or biological causal law. Adults generally categorized all of the machines accurately. Both groups of children categorized familiar possible machines as real, but were agnostic as to the fantasy status of unfamiliar possible machines. Children generally responded that both kinds of impossible machines were make-believe, but 4-year-olds were more likely to make these accurate judgments for the physical than biological items, different from the older children and adults (whose responses were similar). These data suggest that children's judgments about the possibility of machines are not strictly limited by first-hand experience. Young children's domain-specific causal knowledge interacts with their understanding of the fantasy/reality distinction to constrain their inferences in a rational way. (Contains 3 tables and 2 footnotes.)