Prior research indicates a protracted developmental course in category-based reasoning. One possible explanation for the development of this ability is the gradual reorganization of semantic knowledge. To measure development of semantic knowledge we developed a new paradigm, the Semantic Space task, which uses distance in a two-dimensional space to infer semantic similarities between two objects. Using this paradigm we examined development of semantic knowledge in young children (preschoolers, kindergarteners, and first-grade children) and in adults. We also examined whether conceptual organization as measured by the Semantic Space task is predictive of children’s scores on a category-based reasoning task. The findings point to the possibility that development of semantic knowledge plays an important role in the development of category-based reasoning.