Previous studies have shown that preschool-aged children recognize events that violate physical laws as impossible, yet they also believe in fantastical beings such as Santa Claus (Woolley & Cox, 2007). The purpose of this study is to directly compare children?s reasoning about physical possibility to their reasoning about Santa?s extraordinary properties. Children between the ages of four and nine were asked to generate five questions for Santa, which were later coded as either conceptual or factual. They were also asked whether they believe Santa?s extraordinary properties (e.g., the ability to fly), and, if so, how. Afterwards, they were shown five impossible and five improbable events, taken from Shtulman & Carey (2007), and asked to decide whether each was possible. If so, they were asked to explain how it could be achieved. If not, they were asked to explain why it could not be achieved. Although children of all ages believed in Santa and his properties, only the oldest children generated conceptual questions for Santa and attempted to explain how Santa?s properties were possible. Likewise, when faced novel improbable events, only the oldest children attempted to explain how these events could occur in real life. These results suggest that children initially endorse Santa?s properties on the basis of testimony and cultural support. As they begin to reason more systematically about physical possibility, they also begin to question the physical possibility of Santa?s properties, leading them to doubt Santa?s existence by the ages 9 to 10, as indicated by other studies.