Two studies investigated 4- to 7-year-old children's understanding that traits can be causal mechanisms based on desires, as well as mere summaries of behavioral regularities. In Experiment 1, children made predictions given trait information. Children from 5 years made different emotion predictions about the same situation for actors with different traits, thus appreciating traits as psychological causes. For behavior prediction, children over age 4 generalized across situations. In Experiment 2, accurate emotion prediction by 3- to 7-year-olds was linked to understanding desire as a subjective mental property. The results suggest that children change from viewing traits as behavioral regularities to understanding them as internal mediators, and that advances in understanding desire underlie this change. These changes in understanding traits extend research on theory of mind beyond the basic concepts of desire and belief.