Substantial research in developmental science has shown that children are highly sensitive to considerations of equality and equity when making fair distribution decisions. That is, children show a strong preference for equal treatment (e.g., everyone should receive an equal number of resources) in a context-free situation. At the same time, when children perceive a legitimate reason for inequality stemming from moral concerns, such as when one person is perceived as more deserving than others, they will often choose to deviate from strict equality and make decisions based on equity (allocating resources to rectify the inequality), again suggesting a deeply ingrained sense of fairness (Olson & Spelke, 2008; Schmidt, Svetlova, Johe, & Tomasello, 2016). Thus far, no systematic literature review has yielded an in-depth discussion of this line of research, despite the rich findings in the area of children’s understanding of distributive justice. The current review fills this gap by thoroughly synthesizing previous research work on children’s understanding of fair distributions and suggesting future directions for research on the subject.