Illustrations are a salient source of information in children's books yet their effect on children's reading comprehension has only been studied through literal, factual recall. The purpose of the current study was to determine the effect of illustrations on some of the higher-order component skills of reading comprehension, namely making inferences. Identical short stories were presented under different illustration conditions, with pictures that represented different parts of the story. Participants were 73 children from grades two to six. Illustrations both facilitated and interfered with inferencing ability, depending on the type of information depicted, but this effect was reduced as grade increased. Additional findings were that the overall ability to make inferences increased with age and working memory was a significant predictor of this skill. Results are discussed in relation to cognitive and developmental models of comprehension.