This study examined a proposed mechanism by which exposure to cigarette advertising may mediate the subsequent smoking of youth. We hypothesized that children's exposure to cigarette advertising leads them to overestimate the prevalence of smoking, and that these distorted perceptions, in turn, lead to increased intentions to smoke. Children in Finland, where there has been a total tobacco advertising ban since 1978, were compared with children in the United States at a time when tobacco advertising was ubiquitous. Samples of 477 8- to 14-year-old Helsinki students and 453 8- to 14-year-old Los Angeles students whose lifetime cigarette use consisted of no more than a puff of a cigarette were administered questionnaires in their classrooms. The primary hypothesis was confirmed. Los Angeles youth were significantly more likely than Helsinki youth to overestimate the prevalence of adult smoking, in spite of the fact that actual adult smoking prevalence in Helsinki was almost twice that of Los Angeles adults. A similar, significant pattern for perceived peer smoking was obtained, with Los Angeles youth being more likely than Helsinki youth to overestimate prevalence, in spite of the actual greater prevalence of youth smoking in Helsinki.