Since a major task of childhood is learning to get along in a group without disrupting other children's activities, caregivers need explicit guidelines for gentle but effective procedures for dealing with disruptive behaviors in child‐care settings. In a day‐care center for normal 1‐ and 2‐yr‐old children, an effort was made to develop a procedure that appeared sufficiently humane and educational to be acceptable to parents and daycare workers, and yet effective in reducing disruptive play behaviors. Caregivers used the occasion of disruptive behavior to instruct the child in appropriate alternatives, then had the child sit on the periphery and observe the appropriate social behavior of the other children, “sit and watch”, for a brief period before inviting him or her to rejoin the play activities. The effectiveness of this procedure was compared with a method commonly recommended for use with young children: instructing the child, then distracting or redirecting the child to an alternative toy or activity. Contingent observation, combining instruction with a brief timeout (from being a participant in an activity to becoming an observer of the activity), proved considerably more effective in maintaining low levels of disruptions and was considered by caregivers and parents to be an appropriate and socially acceptable method of dealing with young children's disruptive behaviors. Therefore, contingent observation can be recommended for general use in day‐care programs for