In order to develop their language skills, children need to acquire the pragmatic notions which control the organization of information in an utterance and create a cohesive discourse. From a psycholinguistic point of view, this means that it is necessary to research how children become linguistically competent in sentence and discourse organization. Language organization of information in a discourse is observed through characters, time and place of the story. This paper aims to investigate the way children mark story characters. It was investigated how children at various ages introduce a character into the narrative and how they give a new information which becomes given in the process of narration. It was determined whether or not children at various ages mark characters differently and whether there are differences between character marking at local and at global level in a narrative. A wordless picture book Frog, Where Are You? (Mayer, 1969) was used to determine children’s narrative abilities. There were all together 120 unilingual participants. They were all speakers of Croatian at the ages of four, six, eight and ten. The experiment included equal number of children (30) at each age group regardless to their gender. Gathered audio tracks are transcribed in CHAT and analysed in CLAN Program. When marking characters children rely on various language structures, which is the result of both formal and functional principles in language. However, the functional principle appears to be more relevant for the purposes of the paper, in particular its pragmatic aspect. The attempt was made to prove that children have to go through certain development stages while acquiring narrative discourse skills and that there are some individual differences within same age groups.