Prior research indicates a protracted developmental course in inductive reasoning based on category information (Fisher, Matlen, & Godwin, 2011). A possible explanation for the development of adult-like induction is the gradual reorganization of semantic-knowledge. To explore this possibility, we presented preschoolers (N=43), kindergarteners (N=22), first-graders (N=10) and adults (N=20) with blocks representing semantically-similar (e.g., chick-hen), physically-similar (e.g., lamb-swan) and same-habitat (e.g., whale-octopus) animals: Participants placed animal pairs on a board representing a zoo according to the degree of semantic-similarity. The distance between animals was taken as a measure of how closely participants represented the semantic concepts. Preschoolers exhibited considerable variability and were worse at discriminating between semantically-similar and non-semantically-similar dyads compared to older children and adults. Preschoolers’ scores on the semantic-space task were also correlated with performance on an induction task (r=0.46; p=0.002). These results are consistent with the possibility that the organization of semantic-knowledge underlies advances in category-based reasoning.