This study investigates the development of Key Stage Two (KS2) children's understanding of grammatical punctuation. The project was carried out in the context of the National Literacy Strategy's (NLS) Literacy Hour, which has a strong emphasis on the direct teaching of grammar and punctuation. A review of existing research evidence, however, shows that little is known about the development of children's understanding of punctuation as a marker of grammatical structure and why it causes children (and adults) so much difficulty. This study set out to provide an insight into the ways children conceptualise grammatical punctuation and how these conceptions evolve over time. The study was conducted in four primary schools in the Northwest of England. The fieldwork consisted primarily of recording discussions generated by two problem-solving activities which were presented to 96 participating children and which were undertaken in small groups. This thesis presents an interpretative analysis of the conversations that aims to uncover the principles that guide children's thinking about grammatical punctuation use. The interpretation of the data indicates that children rely on four types of principles when making punctuation choices: graphic, semantic, prosodic and grammatical principles. Grammatical principles were used far less frequently than other types. Prosody was found to be relied on most often and to be the source of many errors. Older children seemed able to draw on grammatical principles more than younger ones; but reliance on prosody was still found in Year 6 children. The punctuation knowledge expectations of the NLS for children leaving primary school were not met as even basic sentence demarcation was problematic for children of all ages. This thesis argues for a move away from explanations of punctuation use in terms of prosody by teachersa nd a reassessmenot f learning objectives to reflect the way children's understanding develops