Two experiments were conducted to investigate whether children and adults could construct concept definitions by utilizing the mechanisms proposed by Richards and Goldfarb's (1986) episodic memory model. In Experiment I the question of whether children and adults were able to utilize hypothetical counterexemplar reasoning was examined. When given novel instances and asked to judge whether they were members of familiar categories, subjects attributed concept membership more often to objects possessing form features irrelevant to function than to objects possessing form features interfering with function or objects lacking the ability to function. Subjects justified their answers by referring to the influence of each attribute on the intended function of the object. Experiment 2 examined whether children utilized the functionality rule in making category judgments about novel concepts. Functionality was found to influence the judgments of both children and adults. Results are discussed in terms of Richards and Goldfarb's (1986) model and are related to other evidence that children possess theories about concepts.