The purpose of the study was to investigate how students understand multiplication and division of fractions and how their understanding influences the solutions of fractional word problems. Thirteen students from 5th to 6th grades were involved in the study. Students` understanding of operations with fractions was categorized into "a part of the parts", "multiplicative comparison", "equal groups", "area of a rectangular", and "computational procedures of fractional multiplication (e.g., multiply the numerators and denominators separately)" for multiplications, and "sharing", "measuring", "multiplicative inverse", and "computational procedures of fractional division (e.g., multiply by the reciprocal)" for divisions. Most students understood multiplications as a situation of multiplicative comparison, and divisions as a situation of measuring. In addition, some students understood operations of fractions as computational procedures without associating these operations with the particular situations (e.g., equal groups, sharing). Most students tended to solve the word problems based on their semantic structure of these operations. Students with the same understanding of multiplication and division of fractions showed some commonalities during solving word problems. Particularly, some students who understood operations on fractions as computational procedures without assigning meanings could not solve word problems with fractions successfully compared to other students.