The hypothesized relationship between an individual's age, educational background, and ability to understand aspects of semantic ambiguity was investigated in this study. The 90 subjects included ten students in each of grades two, four, six, eight, and ten, as well as ten college undergraduates, ten graduate students, ten high school graduates, and ten high school dropouts. Testing consisted of paraphrasing tasks designed to assess understanding of lexical, surface structure, and deep structure ambiguity, figurative language in metaphors, symbolic language of proverbs, and multiple referents of pronouns. Data revealed that while the ability to understand ambiguity was not present in all adults, an invariant sequence in the acquisition of understanding was indicated. Both age and educational level were significantly correlated with level of understanding, and a four stage hierarchy of development paralleling Piaget's cognitive hierarchy was suggested. (Author/KS)