Adults are better at recognizing familiar faces from the internal facial features (eyes, nose, mouth) than from the external facial features (hair, face outline). However, previous research suggests that this “internal advantage” does not appear until relatively late in childhood, and some studies suggest that children rely on external features to recognize all faces, whether familiar or not. We use a matching task to examine face processing in 7–8‐ and 10–11‐year‐old children. We use a design in which all face stimuli can be used as familiar items (for participants who are classmates) and unfamiliar items (for participants from a different school). Using this design, we find an internal feature advantage for matching familiar faces, for both groups of children. The same children were then shown the external and internal features of their classmates and were asked to name or otherwise identify them. Again, both age groups identified more of their classmates correctly from the internal than the external features. This is the first time an internal advantage has been reported in this age group. Results suggest that children as young as 7 process faces in the same way as do adults, and that once procedural difficulties are overcome, the standard effects of familiarity are observed.