In a study of gender equity issues in early childhood services, questionnaires were sent to staff and parents associated with five early childhood services in Sydney, New South Wales, Australia. Data were also obtained from observations of interactions between 3- to 5-year-olds and regular staff in the services. Other areas examined in the study were the activity and peer preferences of the children; the level of sex-stereotyped play in the services; and the degree to which there was a match between awareness, perceived behavior, and what was actually occurring. Data indicated that sex-role stereotypes are significant features of children's behavior in some early childhood settings and that these stereotypes are often unconsciously supported by the adults in these settings. A literature review covers materials concerning the development of young children's sex roles and gender equity issues in early childhood education. Recommendations for working towards the removal of stereotypical beliefs and attitudes about the sex role, behavior, and potential of individuals are provided. Appended are 18 references and related materials. (GLR)