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In two studies, 5- and 6-year-old children were questioned about the status of the protagonist embedded in three different types of stories. In realistic stories that only included ordinary events, all children, irrespective of family background and schooling, claimed that the protagonist was a real person. In religious stories that included ordinarily impossible events brought about by divine intervention, claims about the status of the protagonist varied sharply with exposure to religion. Children who went to church or were enrolled in a parochial school, or both, judged the protagonist in religious stories to be a real person, whereas secular children with no such exposure to religion judged the protagonist in religious stories to be fictional. Children's upbringing was also related to their judgment about the protagonist in fantastical stories that included ordinarily impossible events whether brought about by magic (Study 1) or without reference to magic (Study 2). Secular children were more likely than religious children to judge the protagonist in such fantastical stories to be fictional. The results suggest that exposure to religious ideas has a powerful impact on children's differentiation between reality and fiction, not just for religious stories but also for fantastical stories.