The present study reviewed the existing literature on analogical reasoning in young children and discussed the mechanisms underlying analogical development. Analogy is a conceptual strategy whereby children make inferences about novel phenomena, transfer learning across contexts, and extract relevant information from everyday learning experiences on the basis of relational similarity. Several studies suggested that very young children focus primarily on the perceptual similarity between objects. Children develop reasoning abilities that are based on the similarity of relational structures after 5 years of age, in conjunction with the development of their working memory capacity. However, the development of analogical retrievals and analogical projection remain unclear. Thus, the underlying mechanisms that support the development of analogical reasoning are well understood. Acquiring the ability of re-representation is supposed to be an important factor in the development of analogical reasoning.