Adults show a deficit in their ability to localize tactile stimuli to their hands when their arms are in the less familiar, crossed posture. It is thought that this ‘crossed‐hands deficit’ arises due to a conflict between the anatomical and external spatial frames of reference within which touches can be encoded. The ability to localize a single tactile stimulus applied to one of the two hands across uncrossed‐hands and crossed‐hands postures was investigated in typically developing children (aged 4 to 6 years). The effect of posture was also compared across conditions in which children did, or did not, have visual information about current hand posture. All children, including the 4‐year‐olds, demonstrated the crossed‐hands deficit when they did not have sight of hand posture, suggesting that touch is located in an external reference frame by this age. In this youngest age group, when visual information about current hand posture was available, tactile localization performance was impaired specifically when the children's hands were uncrossed. We propose that this may be due to an early difficulty with integrating visual representations of the hand within the body schema. Adults show a deficit in their ability to localize tactile stimuli to their hands when their arms are in the less familiar, crossed posture. It is thought that this “crossed‐hands deficit” arises due to a conflict between the anatomical and external spatial frames of reference within which touches can be encoded. The ability to localize a single tactile stimulus applied to one of the two hands across uncrossed‐hands and crossed‐hands postures was investigated in typically developing children (aged 4 to 6 years). The effect of posture was also compared across conditions in which children did, or did not have, visual information about current hand posture. All children, including the 4‐year‐olds, demonstrated the crossed hands deficit when they did not have sight of hand posture, suggesting that touch is located in an external reference frame by this age. In this youngest age‐group, when visual information about current hand posture was available, tactile localization performance was impaired specifically when the children's hands were uncrossed. We propose that this may be due to an early difficulty with integrating visual representations of the hand within the body schema.