The present study concerned how the acquisition of social information, specifically knowledge about personal characteristics, influences young children's memory and suggestibility. Effects of two sources of knowledge about a target person were systematically examined: familiarity and stereotypes. Children, aged 4–5 and 7–9 years (N = 145), were randomly assigned, per age group, to experimental conditions based on a familiarity (6 hours vs. no prior exposure) × stereotype (negative depiction as messy and clumsy vs. no stereotype) factorial design. Children then watched the target person engage in a target event (a series of contests) at a preschool (“Camp Ingrid”). The children's memory and suggestibility about the target person and target event were tested after a delay of 2 weeks. Results indicated that the negative stereotype resulted in an increase in children's correct responses both to free‐recall stereotype‐related questions (when children were unfamiliar with the target person) and to closed‐ended questions overall (for younger children). However, the stereotype was associated with greater error to stereotype‐related closed‐ended questions. Moreover, familiarity increased children's accuracy to closed‐ended questions. Implications for theory and application are discussed. Copyright © 2016 John Wiley & Sons, Ltd.