Actions are recognized faster and with higher accuracy when they take place in their typical environments. It is unclear, however, when contextual cues from the environment become effectively exploited during childhood and whether contextual integration interacts with other factors such as children’s perceptual or motor experience with an action. In the present experiment, we asked 4- to 8-year-olds (n = 159) to recognize pantomime actions that took place in compatible, incompatible, or neutral contextual settings. In each age cohort, children recognized more actions taking place in compatible compared to incompatible and neutral contexts. This result demonstrates robust facilitation effects of context on action recognition independent of age. Additionally, we found an interaction of context effects with action familiarity: Context effects were strongest when the children were less familiar with the actions, suggesting that contextual settings are particularly beneficial for action recognition when experience with an action is sparse.