The ability of Icelandic children (aged 4 to 8 years) to identify referents of gender-marked pronouns was tested under three conditions: (i) referents with natural/semantic gender, (ii) familiar referents with grammatical gender, (iii) unfamiliar referents with grammatical gender. Potential formal information about grammatical gender was held constant across all conditions. Children's correct identification of pronoun referents was most highly related to the familiarity of the referents and the availability of natural gender information, not to formal gender information. The results are discussed in light of contradictory findings from German. It is argued that subtle differences in the formal gender systems of.the two languages may underlie the different experimental results and may lead to different developmental patterns.