This dissertation reports a series of investigations of the language and cognitive development of 155 preschool children enrolled in 12 Head Start sites in New York City. These investigations were carried out in the context of a quasi-experimental study on the impact of a theatre-in-education curriculum on children's language, theory of mind (ToM), and imaginative development. Children were assessed at two time points and showed significant improvement on all measures. The theatre-in-education program was well run and the intervention was faithfully implemented, yet no significant differences between the intervention group and comparison group were detected. At Time 1, children who spoke only English at home outperformed their English-language-learning peers on measures of vocabulary and narrative development. By Time 2 the English-language learners closed the gap; there were no differences in narrative development related to home language. The relation between children's ToM and narrative development was explored at two time points. Controlling for other variables, children's narrative abilities were significantly related to their concurrent ToM skills. Furthermore, children's Time 1 ToM proficiency predicted their later narrative abilities, and children's earlier narrative skills predicted their later ToM understanding, although this relation was influenced by receptive vocabulary. The validity and reliability of a new measure of children's aural narrative comprehension, the Mages Measure of Story Comprehension (MMSC), was also investigated. This measure assesses children's understanding of a story without requiring oral language production. MMSC scores at both Time 1 and Time 2 were moderately correlated with receptive vocabulary and productive narrative. Children showed substantial improvement from Time 1 to Time 2, and test-retest stability was moderate. This measure appears to be promising for future research on children's aural narrative comprehension. An ethnographic study was conducted of the Creative Arts Team's Early Learning Through the Arts: New York City Wolf Trap Program, the theatre-in-education intervention being assessed. A detailed description of the drama program, including the culture of the company, its directors and actor-teachers, its pedagogy, and the content and context of the Head Start drama intervention is presented to highlight the challenges of designing, implementing, and managing this type of educational drama intervention. (author abstract)