The study of action-cognition is driven by the assumption that what one can do motorically depends on what one can conceive of mentally, given a set of external opportunities (Rosenbaum, Cohen, & Jax, 2007). Therefore, a comprehensive theory of action development ought to integrate perceptual aspects of action processing with conceptual changes that give rise to increasingly abstract behaviours. How and why children progress to higher levels of organization in the processing and coordination of purposeful behaviour is a question that has been at the core of developmental research for decades. Various competences underlying early action processing and decision-making have been identified and linked to sophisticated mental operations later in life. However, considerably less is known about the relationships between perceptual and conceptual abilities and how they interact to shape action development. Goal-pursuit is achieved with increasing efficiency during the preschool period. In fact, by the age of first grade children show substantial abilities to regulate actions into hierarchically structured sequences of events that can be transferred across contexts (e.g., Levy, 1980; Bell & Livesey, 1985; Livesey & Morgan, 1991). The aim of this project was to investigate the perceptual and conceptual processes that drive these remarkable advances as they emerge during the preschool years. The studies in this thesis investigate top-down and bottom-up interactions in the processing of actions at various levels of abstraction. Employing a range of novel paradigms, the results of four studies highlight considerable advances in preschoolers’ abilities to organise actions in terms of goal hierarchies. Findings further highlight that the ability to extract structure at a basic level is readily achieved early in life, while higher-level action comprehension and planning abilities continue to develop throughout the childhood years.