In many cultural contexts, judging another as conscious or not has profound practical, legal, and philosophical consequences. However, little research focuses on how our ability to make such judgements arises. Thirty years ago a classic set of studies by Flavell et al. demonstrated that children do not develop a complex understanding of conscious ideation in others until age 8. We investigated whether children understand a more basic aspect of conscious experience at earlier ages: a person has conscious thoughts when awake in contrast to when soundly, dreamlessly asleep. We tested 211 3-to-13-year-old children, who watched video sequences, focally one where a person was asleep and then awoke. Children were half as likely to say the target was having thoughts while asleep compared to awake. Even the youngest children made this distinction, demonstrating that children as young as 3-years have at least a basic understanding of consciousness in others.