While recent studies find that contextual diversity (CD) is a better determinant of visual word recognition than token frequency, there is a dearth of work comparing contextual diversity and token frequency in developing readers. In two sets of character and lexical decision experiments we examined token frequency and contextual diversity effects for fourth-grade children in Chinese. Experiments 1a and 1b used Chinese characters and words from SUBTLEX-CH. Experiments 2a and 2b used characters and words from a new corpus developed from Chinese primary school textbooks and reading materials from Grade 1 to 4. In both sets of experiments, CD affected character and lexical decision times but token frequency did not. The results are discussed in terms of recent context-based accounts of word learning and lexical processing, and implications are presented for models of skilled and developing reading.