We examined the visual capture of perceived hand position in forty-five 5- to 7-year-olds and in fifteen young adults, using a mirror illusion task. In this task, participants see their left hand on both the left and right (by virtue of a mirror placed at the midline facing the left arm, and obscuring the right). The accuracy of participants' reaching was measured when proprioceptive and visual cues to the location of the right arm were put into conflict (by placing the arms at different distances from the mirror), and also when only proprioceptive information was available (i.e., when the mirror was covered). Children in all age-groups (and adults) made reaching errors in the mirror condition in accordance with the visually-specified illusory starting position of their hand indicating a visual capture of perceived hand position. Data analysis indicated that visual capture increased substantially up until 6 years of age. These findings are interpreted with respect to the development of the visual guidance of action in early childhood.